What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-08 compared with 2021-08-09 · 96 added, 91 removed, 393 unchanged (32% of the section changed)

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Through our UltraCAR-T therapeutics platform, we are able to precision-engineer UltraCAR-T cells to produce a homogeneous cell product that simultaneously expresses antigen-specific chimeric antigen receptor, or CAR, kill switch, and our proprietary membrane-bound interleukin-15, or mbIL15, genes in any genetically modified UltraCAR-T cell.

Our decentralized and rapid proprietary manufacturing process allows us to manufacture UltraCAR-T cells overnight at a medical center's current good manufacturing practices facility and reinfuse the patient the following day after gene transfer.

Our decentralized and rapid proprietary manufacturing process allows us to manufacture UltraCAR-T cells overnight at a medical center's current good manufacturing practices facility, or cGMP, and reinfuse the patient the following day after gene transfer.

This process improves upon current approaches to CAR-T manufacturing, which require extensive ex vivo expansion following viral vector transduction to achieve clinically relevant cell numbers that we believe can result in the exhaustion of CAR-T cells prior to their administration, limiting their potential for persistence in patients.

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PRGN-3006 is a first-in-class, investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to express a CAR to target CD33 (Siglec-3), mbIL15 and kill switch genes.

PRGN-3006 is currently being evaluated in an investigator-initiated Phase 1/1b clinical trial for the treatment of relapsed or refractory acute myeloid leukemia, or AML, higher-risk myelodysplastic syndromes, or MDS, and chronic myelomonocytic leukemia, or CMML.

PRGN-3006 is currently being evaluated in a Phase 1/1b clinical trial for the treatment of relapsed or refractory acute myeloid leukemia, or AML, higher-risk myelodysplastic syndromes, or MDS, and chronic myelomonocytic leukemia, or CMML.

A dose escalation phase of each of the non-lymphodepletion and the lymphodepletion arms of this Phase 1 trial is ongoing concurrently.

The dose escalation phase of each arm is planned to be followed by an expansion phase at the MTD.

An expansion phase is planned at the MTD.

PRGN-3006 was granted Orphan Drug designation for the treatment of AML by the FDA.

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ActoBio's most advanced internal pipeline candidate, AG019, is a first-in-class disease modifying antigen-specific, investigational immunotherapy for the prevention, delay, or reversal of type 1 diabetes mellitus, or T1D.

AG019 is an easy-to-take capsule formulation of ActoBiotics engineered to deliver the autoantigen human proinsulin, or PINS, and the tolerance-enhancing cytokine human interleukin-10 to the mucosal lining of gastro-intestinal tissues in patients with T1D.

AG019 is an easy-to-take capsule formulation of ActoBiotics engineered to deliver the autoantigen human proinsulin, or hPINS, and the tolerance-enhancing cytokine human interleukin-10 to the mucosal lining of gastro-intestinal tissues in patients with T1D.

AG019 is currently in a Phase 1b/2a clinical trial for the treatment of early-onset T1D.

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Interim data presented showed an encouraging trend in C-peptide levels, a biomarker for T1D disease progression, at six months after AG019 monotherapy treatment initiation.

AG019 monotherapy resulted in stabilization of glycated hemoglobin, or HbA1c, and insulin-dose adjusted HbA1c, or IDAA1c, levels, important indicators of long-term glycemic control in T1D patients, up to twelve months after treatment initiation.

Furthermore, AG019 monotherapy induced antigen-specific tolerance in conjunction with the reduction of disease-specific T cell responses six months post treatment initiation.

Data from the Phase 2a portion showed that the combination was well-tolerated and the preliminary data at six months after treatment initiation showed an encouraging trend in C-peptide levels compared to baseline levels.

Interim data from the Phase 2a portion showed an encouraging trend in C-peptide levels at six months after treatment initiation and stabilization of HbA1c and IDAA1c levels up to twelve months after treatment initiation.

The combination of AG019 and teplizumab showed the induction of antigen-specific tolerance in conjunction with reduction of disease-specific T cell responses at six months post treatment initiation.

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The FDA has granted Orphan Drug designation to FCX-013 for the treatment of localized scleroderma.

In addition, FCX-013 has been granted Rare Pediatric Disease designation and Fast Track designation for the treatment of moderate to severe localized scleroderma.

Pursuant to the collaboration, we licensed our technology platforms to Castle Creek for use in certain specified fields, and in exchange, we received and were

entitled to certain access fees, milestone payments, royalties, and sublicensing fees related to the development and commercialization of product candidates.

In addition, FCX-013 has been granted Rare Pediatric Disease designation

and Fast Track designation for the treatment of moderate to severe localized scleroderma.

Pursuant to the collaboration, we licensed our technology platforms to Castle Creek for use in certain specified fields, and in exchange, we received and were entitled to certain access fees, milestone payments, royalties, and sublicensing fees related to the development and commercialization of product candidates.

In March 2020, we and Castle Creek terminated the original collaboration agreement by mutual agreement, with the parties agreeing that FCX-007 and FCX-013 would be treated as "Retained Products" under the terms of the original agreement.

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Our Non-Healthcare Business

At June 30, 2021, our only non-healthcare business is our established bovine genetics company, Trans Ova Genetics, L.C., or Trans Ova.

At September 30, 2021, our only non-healthcare business is our established bovine genetics company, Trans Ova Genetics, L.C., or Trans Ova.

Trans Ova is internationally recognized as a provider of industry-leading bovine reproductive technologies.

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Through extensive research programs and applied science, Trans Ova has developed and implemented new technologies that, we believe, have helped to move the science of bovine genetic improvement forward.

We continue to evaluate the optimal means to utilize these technology assets and Trans Ova's broad customer base and deep industry knowledge to maximize the value of the business.

We are evaluating strategic alternatives to determine the optimal means to utilize these technology assets and Trans Ova's broad customer base and deep industry knowledge to maximize the value of the business for our shareholders, including a potential sale of the business, the development of collaborations with third parties, and other strategic opportunities.

COVID-19 Impact

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The health and safety of our employees is of the utmost importance.

Our essential employees are practicing appropriate safety measures, including social distancing and use of personal protective equipment.

These efforts have permitted us to continue to advance our programs, with the ultimate goal of benefiting patients.

We have implemented safety measures in our facilities for the well-being of our employees and visitors.

These measures have permitted us to continue to advance our programs, with the ultimate goal of benefiting patients.

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

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Discontinued Operations

Historically, we developed technology platforms for application across a variety of diverse end markets, including health, food, energy, and environment.

Historically, we developed technology platforms for application across a variety of diverse end markets, including health, food, energy, and the environment.

In January 2020, we announced that we were increasing our focus on our healthcare opportunities, which reflected our most advanced platforms, and in connection therewith, we divested a number of our non-healthcare assets (referred to collectively as the Transactions) and changed our name to Precigen, Inc.

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See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 4" appearing elsewhere in this Quarterly Report for a discussion of Intrexon Energy Partners and Intrexon Energy Partners II.

As of June 30, 2021, our reportable segments were (i) Biopharmaceuticals, (ii) Exemplar, and (iii) Trans Ova.

These identified reportable segments met the quantitative thresholds to be reported separately for the six months ended June 30, 2021.

As of September 30, 2021, our reportable segments were (i) Biopharmaceuticals, (ii) Exemplar, and (iii) Trans Ova.

These identified reportable segments met the quantitative thresholds to be reported separately for the nine months ended September 30, 2021.

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 our finance, accounting, legal, human resources, information technology, corporate communication, and investor relations functions.

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We may enter into strategic transactions for individual platforms or programs in the future from which we may generate new collaboration and licensing revenues.

We continue to generate product and service revenues through our Trans Ova and Exemplar subsidiaries, and in the six months ended June 30, 2021, both of these subsidiaries generated positive Segment Adjusted EBITDA.

We continue to generate product and service revenues through our Trans Ova and Exemplar subsidiaries, and in the nine months ended September 30, 2021, both of these subsidiaries generated positive Segment Adjusted EBITDA.

Products currently in our clinical pipeline will require regulatory approval and/or commercial scale-up before they may commence significant product sales and operating profits.

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Our research and development expenses are generally incurred by our reportable segments and primarily relate to either costs incurred to expand or otherwise improve our technologies or the costs incurred to develop our own products and services.

Our Biopharmaceuticals segment is progressing preclinical and clinical programs that target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases, including PRGN-3005, PRGN-3006, AG019, and INXN-4001.

Exemplar's research and development activities relate to new and improved pig research models.

Trans Ova's research and development activities support new and improved product and service offerings for its customers.

The following table summarizes our research and development expenses incurred by reportable segment and reconciles those expenses to research and development expenses on the condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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Selling, general and administrative expenses

Selling, general and administrative, or SG&A, expenses consist primarily of salaries and related costs, including stock-based compensation expense, for employees in executive, operational, finance, information technology, legal, and corporate communications functions.

communications functions.

Other significant SG&A expenses include rent and utilities, insurance, accounting, and legal services (including the cost of settling any claims and lawsuits), and expenses associated with obtaining and maintaining our intellectual property.

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Results of operations

Comparison of the three months ended June 30, 2021 and the three months ended June 30, 2020

The following table summarizes our results of operations for the three months ended June 30, 2021 and 2020, together with the changes in those items in dollars and as a percentage:

Comparison of the three months ended September 30, 2021 and the three months ended September 30, 2020

The following table summarizes our results of operations for the three months ended September 30, 2021 and 2020, together with the changes in those items in dollars and as a percentage:

Three Months Ended

June 30, Dollar

September 30, Dollar

Change Percent

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Selling, general and administrative 18,660 22,310 (3,650) (16.4) %

Impairment of other noncurrent assets 543 — 543 N/A

Impairment of other noncurrent assets — 920 (920) (100.0) %

Total operating expenses 47,030 46,589 441 0.9 %

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Net loss $ (29,764) $ (29,508) $ (256) 0.9 %

(1) Includes $0 and $32 from related parties for the three months ended June 30, 2021 and 2020, respectively.

(1) Includes $0 and $2,823 from related parties for the three months ended September 30, 2021 and 2020, respectively.

(2) See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 3" appearing elsewhere in this Quarterly Report.

Collaboration and licensing revenues

Collaboration and licensing revenues decreased $4.0 million, or 93%, from the three months ended June 30, 2020 primarily due to a decrease in the recognition of previously deferred revenue in the current period resulting from fewer services being performed pursuant to a March 2020 termination agreement with Castle Creek.

Collaboration and licensing revenues decreased $5.2 million, or 100%, from the three months ended September 30, 2020 primarily due to accelerated recognition of previously deferred revenue upon the mutual termination of a collaboration with Oragenics, Inc., or Oragenics, in July 2020 and a decrease in the recognition of previously deferred revenue in the current period resulting from fewer services being performed pursuant to a March 2020 termination agreement with Castle Creek.

Product revenues and gross margin

Product revenues were comparable to the three months ended June 30, 2020 as expected.

Product revenues were comparable to the three months ended September 30, 2020 as expected.

Gross margin on products improved in the current period as a result of increased focus on selling higher margin products, and operational efficiencies that have been gained through reductions in workforce and improved inventory management.

Service revenues and gross margin

Service revenues increased $7.4 million, or 43%, over the three months ended June 30, 2020.

Trans Ova's revenues and gross margins thereon improved primarily due to an increase in services performed as a result of higher customer demand as the beef and dairy industries have been stronger in the current year and a change in pricing structure with certain customers.

Additionally, Exemplar's service revenues and gross margins thereon improved in the current period due to an increase in services performed resulting from a higher demand from existing and new customers as well as a combination of price increases and a change in the pricing structure with certain customers.

Service revenues increased $2.8 million, or 25%, over the three months ended September 30, 2020.

Trans Ova's revenues improved primarily due to an increase in services performed as a result of higher customer demand as the beef and dairy industries have been stronger in the current year and a change in pricing structure with certain customers.

Additionally, Exemplar's service revenues improved in the current period due to an increase in services performed resulting from a higher demand from existing and new customers as well as a combination of price increases and a change in the pricing structure with certain customers.

Gross margin on services declined in the current period as a result of increased costs for supplies and drugs.

Research and development expenses

Research and development expenses increased $4.2 million, or 44%, over the three months ended June 30, 2020.

Research and development expenses increased $2.7 million, or 27%, over the three months ended September 30, 2020.

Contract research organization costs and lab supplies increased $2.2 million with the advancement of our clinical and preclinical programs.

Selling, general and administrative expenses

SG&A expenses increased $2.1 million, or 12%, over the three months ended June 30, 2020.

Professional fees increased $1.8 million primarily due to an increase in legal fees associated with certain current litigation matters.

SG&A expenses decreased $3.7 million, or 16%, from the three months ended September 30, 2020.

Salaries, benefits, and other personnel costs decreased $2.2 million primarily due to (i) a reduced headcount as we scaled down our corporate functions to support our more streamlined organization and (ii) reduced stock compensation for previously granted awards that became fully vested in 2021.

There was a reduction of $2.5 million for the nonrecurring settlement with the Securities and Exchange Commission, or SEC, in the prior period.

This was partially offset by an increase in professional fees of $0.7 million, primarily due to increased legal fees associated with certain litigation matters.

Segment performance

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the three months ended June 30, 2021 and 2020, for each of our reportable segments as well as unallocated corporate costs.

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the three months ended September 30, 2021 and 2020, for each of our reportable segments as well as unallocated corporate costs.

Three Months Ended

June 30, Dollar

September 30, Dollar

Change Percent

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For a reconciliation of Segment Adjusted EBITDA to net loss from continuing operations before income taxes, see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 19" appearing elsewhere in this Quarterly Report.

The following table summarizes revenues from external customers for the three months ended June 30, 2021 and 2020, for each of our reportable segments.

The following table summarizes revenues from external customers for the three months ended September 30, 2021 and 2020, for each of our reportable segments.

Three Months Ended

June 30, Dollar

September 30, Dollar

Change Percent

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Biopharmaceuticals

The decrease in revenues for Biopharmaceuticals was primarily due to a decrease in the recognition of previously deferred revenue in the current period resulting from fewer services being performed pursuant to a termination agreement with Castle Creek.

The decrease in revenues for Biopharmaceuticals was primarily due to accelerated recognition of previously deferred revenue upon the mutual termination of a collaboration with Oragenics in July 2020 and due to a decrease in the recognition of

previously deferred revenue in the current period resulting from fewer services being performed pursuant to a termination agreement with Castle Creek.

Segment Adjusted EBITDA declined as we had increased costs associated with the advancement of our clinical and preclinical programs.

Revenues for Exemplar increased due to an increase in services performed resulting from a higher demand from existing and new customers.

Revenues also increased due to price increases as well as a change in the pricing structure with certain customers.

The improvement in Segment Adjusted EBITDA was primarily due to the increased revenues and reduced costs as a result of operational efficiencies gained through reductions in workforce and improved inventory management.

Revenues for Trans Ova increased primarily due to higher customer demand for pregnant cows and more procedures performed as a result of stronger beef and dairy industries in the current year.

Revenues also increased due to a change in the pricing structure with certain customers.

The improvement in Segment Adjusted EBITDA was primarily due to the increased revenues, as well as reduced costs as a result of operational efficiencies gained through reductions in workforce and improved inventory management.

Segment Adjusted EBITDA was comparable period over period as expected.

Revenues for Trans Ova increased primarily due to (i) higher customer demand for pregnant cows, (ii) more procedures performed as a result of stronger beef and dairy industries in the current year, and (iii) a change in the pricing structure with certain customers.

Segment Adjusted EBITDA declined due to (i) increased costs for supplies and drugs, (ii) increased costs for certain legal matters, and (iii) increased provision for credit losses driven by increased sales.

Unallocated Corporate Costs

Unallocated corporate costs increased primarily due to increased professional fees associated with certain current litigation matters.

Comparison of the six months ended June 30, 2021 and the six months ended June 30, 2020

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020, together with the changes in those items in dollars and as a percentage:

Six Months Ended

June 30, Dollar

Unallocated corporate costs decreased primarily due to decreased legal fees associated with certain litigation matters, including our settlement with the SEC in the prior period.

Comparison of the nine months ended September 30, 2021 and the nine months ended September 30, 2020

The following table summarizes our results of operations for the nine months ended September 30, 2021 and 2020, together with the changes in those items in dollars and as a percentage:

Nine Months Ended

September 30, Dollar

Change Percent

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Selling, general and administrative 57,359 61,665 (4,306) (7.0) %

Impairment of other noncurrent assets 543 — 543 N/A

Impairment of other noncurrent assets 543 920 (377) (41.0) %

Total operating expenses 138,483 135,281 3,202 2.4 %

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Net loss $ (67,132) $ (128,860) $ 61,728 (47.9) %

(1) Includes $0 and $230 from related parties for the six months ended June 30, 2021 and 2020, respectively.

(1) Includes $0 and $3,053 from related parties for the nine months ended September 30, 2021 and 2020, respectively.

(2) See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 3" appearing elsewhere in this Quarterly Report.

Collaboration and licensing revenues

Collaboration and licensing revenues decreased $14.7 million, or 98%, from the six months ended June 30, 2020 primarily due to the accelerated recognition of previously deferred revenue in the prior period upon the mutual termination of a collaboration with Castle Creek in February 2020.

Collaboration and licensing revenues decreased $19.9 million, or 98%, from the nine months ended September 30, 2020 primarily due to the accelerated recognition of previously deferred revenue in the prior period upon the mutual terminations of collaborations with Castle Creek and Oragenics in 2020.

Product revenues and gross margin

Product revenues increased $1.2 million, or 9%, over the six months ended June 30, 2020.

Product revenues increased $1.6 million, or 8%, over the nine months ended September 30, 2020.

The increase in product revenue was primarily due to higher customer demand for animals as a result of stronger beef and dairy industries in the current year.

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Service revenues and gross margin

Service revenues increased $11.4 million, or 36%, over the six months ended June 30, 2020.

Service revenues increased $14.2 million, or 33%, over the nine months ended September 30, 2020.

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Research and development expenses

Research and development expenses increased $3.4 million, or 16%, over the six months ended June 30, 2020.

Research and development expenses increased $6.1 million, or 20%, over the nine months ended September 30, 2020.

Contract research organization costs and lab supplies increased $5.9 million with the advancement of our clinical and preclinical programs.

Selling, general and administrative expenses

SG&A expenses were comparable period over period due to offsetting changes.

Salaries, benefits, and other personnel costs decreased $1.6 million in 2021 primarily due to a reduced headcount as we scaled down our corporate functions to support our more streamlined organization and reduced stock compensation costs for previously granted awards that became fully vested in early 2021.

These decreases were partially offset by an increase in professional fees associated with certain current litigation matters.

SG&A expenses decreased $4.3 million, or 7%, from the nine months ended September 30, 2020.

Salaries, benefits, and other personnel costs decreased $3.8 million in 2021 primarily due to (i) a reduced headcount as we scaled down our corporate functions to support our more streamlined organization and (ii) reduced stock compensation costs for previously granted awards that became fully vested in early 2021.

There was a reduction of $2.5 million for the nonrecurring settlement with the SEC in the prior period.

This was partially offset by an increase in professional fees of $1.5 million, primarily due to an increase in legal fees associated with certain litigation matters.

Segment performance

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the six months ended June 30, 2020 and 2020, for each of our reportable segments as well as unallocated corporate costs.

Six Months Ended

June 30, Dollar

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the nine months ended September 30, 2020 and 2020, for each of our reportable segments as well as unallocated corporate costs.

Nine Months Ended

September 30, Dollar

Change Percent

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The following table summarizes revenues from external customers for the six months ended June 30, 2021 and 2020, for each of our reportable segments.

Six Months Ended

June 30, Dollar

The following table summarizes revenues from external customers for the nine months ended September 30, 2021 and 2020, for each of our reportable segments.

Nine Months Ended

September 30, Dollar

Change Percent

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Biopharmaceuticals

The decrease in revenues for Biopharmaceuticals was primarily due to the accelerated recognition of previously deferred revenue in the prior period upon the mutual termination of a collaboration with Castle Creek in February 2020.

The decrease in revenues for Biopharmaceuticals was primarily due to the accelerated recognition of previously deferred revenue in the prior period upon the mutual terminations of collaborations with Castle Creek and Oragenics in 2020.

Segment Adjusted EBITDA declined as we had increased costs associated with the advancement of our clinical and preclinical programs.

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Unallocated Corporate Costs

Unallocated corporate costs were comparable period over period due to offsetting changes.

Our unallocated corporate costs decreased from the prior period primarily due to a reduction of corporate employees as we scaled down our corporate functions to support our more streamlined organization.

These decreases were partially offset with increased professional fees associated with certain current litigation matters.

Unallocated corporate costs decreased primarily due to decreased legal fees associated with certain litigation matters, including our settlement with the SEC in the prior period, and due to a reduction of corporate employees as we scaled down our corporate functions to support our more streamlined organization.

Liquidity and capital resources

Sources of liquidity

We have incurred losses from operations since our inception, and as of June 30, 2021, we had an accumulated deficit of $1.9 billion.

From our inception through June 30, 2021, we have funded our operations principally with proceeds received from private and public equity and debt offerings, cash received from our collaborators, and through product and service sales made directly to customers.

As of June 30, 2021, we had cash and cash equivalents of $36.4 million and short-term and long-term investments of $164.0 million.

We have incurred losses from operations since our inception, and as of September 30, 2021, we had an accumulated deficit of $1.9 billion.

From our inception through September 30, 2021, we have funded our operations principally with proceeds received from private and public equity and debt offerings, cash received from our collaborators, and through product and service sales made directly to customers.

As of September 30, 2021, we had cash and cash equivalents of $41.7 million and short-term and long-term investments of $139.6 million.

Cash in excess of immediate requirements is typically invested primarily in money market funds and U.S.

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We currently generate cash receipts primarily from sales of products and services and from strategic transactions.

As of June 30, 2021, Trans Ova was in compliance with the debt covenants associated with its line of credit as discussed in "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 11" appearing elsewhere in this Quarterly Report.

Trans Ova is subject to certain restrictive covenants under its line of credit which is discussed in "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 11" appearing elsewhere in this Quarterly Report.

As of September 30, 2021, Trans Ova was in compliance with these debt covenants or had obtained appropriate waivers from the bank.

The following table sets forth the significant sources and uses of cash for the periods set forth below:

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

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Cash flows from operating activities:

During the six months ended June 30, 2021, our net loss was $37.4 million, which includes the following significant noncash expenses totaling $21.6 million from both continuing and discontinued operations:

(i) $9.0 million of stock-based compensation

expense, (ii) $7.0 million of depreciation and amortization expense, and (iii) $5.6 million accretion of debt discount and amortization of deferred financing costs.

During the nine months ended September 30, 2021, our net loss was $67.1 million, which includes the following significant noncash expenses totaling $30.5 million from both continuing and discontinued operations:

(i) $11.5 million of stock-based compensation expense, (ii) $10.4 million of depreciation and amortization expense, and (iii) $8.6 million accretion of debt discount and amortization of deferred financing costs.

These expenses were partially offset by a $4.6 million noncash gain recognized upon the termination of our MBP Titan facility lease in January 2021.

During the six months ended June 30, 2020, our net loss was $99.4 million, which includes the following significant noncash expenses totaling $73.0 million from both continuing and discontinued operations:

(i) $27.0 million of accumulated foreign currency translation losses that were realized upon the closing of the Transactions, (ii) $22.0 million of impairment losses related to goodwill and long-lived assets, (iii) $9.6 million of depreciation and amortization expense, (iv) $9.3 million of stock-based compensation expense, and (v) $5.1 million accretion of debt discount and amortization of deferred financing costs.

These expenses were partially offset by the recognition of $10.0 million of previously deferred revenue upon the mutual termination of a collaboration with Castle Creek in February 2020.

Our cash outflows from operations during the six months ended June 30, 2021 decreased $17.4 million from the six months ended June 30, 2020 primarily due to (i) increased cash inflows provided by Trans Ova and Exemplar due to increased revenues and gross margins thereon, (ii) the reduction in cash requirements for MBP Titan as we suspended those operations in the second quarter of 2020, and (iii) reductions in operating expenses for our corporate operations as we streamlined operations in order to further prioritize the use of our capital.

During the nine months ended September 30, 2020, our net loss was $128.9 million, which includes the following significant noncash expenses totaling $85.4 million from both continuing and discontinued operations:

(i) $27.0 million of accumulated foreign currency translation losses that were realized upon the closing of the Transactions, (ii) $23.0 million of impairment losses related to goodwill and long-lived assets, (iii) $13.9 million of stock-based compensation expense, (iv) $13.7 million of depreciation and amortization expense, and (v) $7.8 million accretion of debt discount and amortization of deferred financing costs.

These expenses were partially offset by the recognition of $12.8 million of previously deferred revenue upon the mutual terminations of collaboration agreements with Castle Creek and Oragenics in 2020.

Our cash outflows from operations during the nine months ended September 30, 2021 decreased $19.4 million from the nine months ended September 30, 2020 primarily due to (i) increased cash inflows provided by Trans Ova and Exemplar due to increased revenues and gross margins thereon, (ii) the reduction in cash requirements for MBP Titan as we suspended those operations in the second quarter of 2020, and (iii) reductions in operating expenses for our corporate operations as we streamlined operations in order to further prioritize the use of our capital.

Cash flows from investing activities:

During the six months ended June 30, 2021, we purchased $116.2 million of investments, net of maturities and sales, primarily using the proceeds received from the underwritten public offering discussed below.

During the six months ended June 30, 2020, we purchased $76.3 million of investments, net of maturities, primarily using the $64.2 million of proceeds received from the Transactions, net of cash sold, and the private placement discussed below.

During the nine months ended September 30, 2021, we purchased $92.2 million of investments, net of maturities and sales, primarily using the proceeds received from the underwritten public offering discussed below.

During the nine months ended September 30, 2020, we purchased $75.4 million of investments, net of maturities, primarily using the $64.2 million of proceeds received from the Transactions, net of cash sold, and the private placement discussed below.

Cash flows from financing activities:

During the six months ended June 30, 2021, we received $121.0 million net proceeds from the sale of our common stock in an underwritten public offering.

During the six months ended June 30, 2020, we received $35.0 million proceeds from the sale of our common stock in a private placement to TS Biotechnology Holdings, LLC.

During the nine months ended September 30, 2021, we received $121.0 million net proceeds from the sale of our common stock in an underwritten public offering.

During the nine months ended September 30, 2020, we received $35.0 million proceeds from the sale of our common stock in a private placement to TS Biotechnology Holdings, LLC.

Future capital requirements

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Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments from continuing operations as of June 30, 2021 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:

The following table summarizes our significant contractual obligations and commitments from continuing operations as of September 30, 2021 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:

Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years

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(1) See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Notes 11" appearing elsewhere in this Quarterly Report for further discussion of our convertible debt.

In addition to the obligations in the table above, as of June 30, 2021 we also have the following significant contractual obligations described below.

In addition to the obligations in the table above, as of September 30, 2021 we also have the following significant contractual obligations described below.

In conjunction with the formation of our JVs, we committed to making future capital contributions subject to certain conditions and limitations.

As of June 30, 2021, our remaining capital contribution commitments to our JVs were $14.2 million.

As of September 30, 2021, our remaining capital contribution commitments to our JVs were $14.2 million.

These future capital contributions are not included in the table above due to the uncertainty of the timing and amounts of such contributions.

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These agreements are generally subject to termination by us and therefore no amounts are included in the tables above.

As of June 30, 2021, we also had research and development commitments with third parties totaling $17.0 million that had not yet been incurred.

As of September 30, 2021, we also had research and development commitments with third parties totaling $15.7 million that had not yet been incurred.

Net operating losses

As of June 30, 2021, we had net operating loss carryforwards of approximately $813.7 million for U.S.

As of September 30, 2021, we had net operating loss carryforwards of approximately $836.6 million for U.S.

federal income tax purposes available to offset future taxable income, including $583.9 million generated after 2017, U.S.

5 unchanged sentences

As a result of our past issuances of stock, as well as due to prior mergers and acquisitions, certain of our net operating losses have been subject to limitations pursuant to Section 382.

As of June 30, 2021, Precigen has utilized all net operating losses subject to Section 382 limitations, other than those losses inherited via acquisitions.

As of June 30, 2021, approximately $42.1 million of domestic net operating losses were inherited via acquisitions and are limited based on the value of the target at the time of the transaction.

As of September 30, 2021, Precigen has utilized all net operating losses subject to Section 382 limitations, other than those losses inherited via acquisitions.

As of September 30, 2021, approximately $42.1 million of domestic net operating losses were inherited via acquisitions and are limited based on the value of the target at the time of the transaction.

Future changes in stock ownership may also trigger an ownership change and, consequently, a Section 382 limitation.

Off-balance sheet arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under Securities and Exchange Commission, or SEC, rules.

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.

Critical accounting policies and estimates

8 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis