~~Virginia~~

Virginia

26-0084895

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

20374 Seneca Meadows Parkway

~~Germantown, Maryland~~

~~20876~~

Germantown,

Maryland

20876

(Address of principal executive offices)

(Zip Code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

PGEN

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

x☐

Accelerated filer

¨☒

Non-accelerated filer

¨ ~~(Do not check if a smaller reporting company)~~

☐

Smaller reporting company

¨☐

Emerging growth company

��

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒

As of ~~October 31, 2017, 120,720,505~~April 30, 2021, 206,414,135 shares of common stock, no par value per share, were issued and outstanding.

Intrexon^®, Trans Ova Genetics^®, ~~Oxitec~~^Progentus®, ~~ViaGen~~^UltraCAR-T®, ~~BioPop~~^RheoSwitch®, ~~ActoBiotics~~^{UltraVector®}, RTS®, and ~~AquAdvantage~~^{RheoSwitch Therapeutic System®} are our and/or our affiliates' registered trademarks in the United States and ~~AquaBounty™, EnviroFlight™~~ActoBiotics™, GenVec™, ~~Okanagan Specialty Fruits™~~Precigen™, AdenoVerse™, ActoBio Therapeutics™, UltraPorator™, AttSite™, and ~~AdenoVerse™~~Precigen Therapeutics™ are our and/or our affiliates' common law trademarks in the United States. This ~~quarterly report~~Quarterly Report on Form 10-Q, or Quarterly Report, and the information incorporated herein by reference contain references to trademarks, service marks, and trade names owned by us or other companies. Solely for convenience, trademarks, service marks, and trade names referred to in this ~~quarterly report~~Quarterly Report and the information incorporated herein, including logos, artwork, and other visual displays, may appear without the ^® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks, and trade names. We do not intend our use or display of other companies' trade names, service marks, or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names, and service marks appearing in this ~~quarterly report~~Quarterly Report are the property of their respective owners. Unless the context requires otherwise, references in this Quarterly Report to "Precigen", "we", "us", and "our" refer to Precigen, Inc.

This Quarterly Report ~~on Form 10-Q~~ contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Quarterly Report, ~~on Form 10-Q~~including statements regarding our ~~strategy,~~strategy; future events, including their outcome or timing; future ~~operations,~~operations; future financial ~~position,~~position; future ~~revenue,~~revenue; projected ~~costs, prospects, plans,~~costs; prospects; plans; objectives of ~~management~~management; and expected market growth, are forward-looking statements. The words ~~"anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project,"~~"aim", "anticipate", "assume", "believe", "continue", "could", "due", "estimate", "expect", "intend", "may", "plan", "positioned", "potential", "predict", "project", "seek", "should", "target", "will", "would", and the negatives of these terms or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These ~~forward-looking~~ statements ~~include,~~may relate to, among other ~~things, statements about:~~

Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, and may also concern our expectations relating to our subsidiaries and other affiliates. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly ~~Report on Form 10-Q.~~Report.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the

cautionary statements included in this Quarterly Report, ~~on Form 10-Q,~~ particularly in Part II, Item ~~1A.~~1A, "Risk Factors," that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, ~~joint ventures~~JVs, or investments that we may make.

You should read this Quarterly Report, ~~on Form 10-Q,~~ the documents that we reference in this Quarterly Report, ~~on Form 10-Q,~~ our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020, the other reports we have filed with the Securities and Exchange Commission, or SEC, and the documents that we have filed as exhibits to our filings with the ~~Securities and Exchange Commission~~SEC completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Item 1. Condensed Consolidated Financial Statements

~~Intrexon Corporation~~Precigen, Inc. and Subsidiaries

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

(Amounts in thousands, except share data) September 30,
2017 December 31,
2016
Liabilities and Total Equity
Current liabilities
Accounts payable $ 7,852
$ 8,478
Accrued compensation and benefits 11,206
6,540
Other accrued liabilities 18,960
15,776
Deferred revenue 48,289
53,364
Lines of credit 234
820
Current portion of long term debt 439
386
Deferred consideration —
8,801
Related party payables 816
440
Total current liabilities 87,796
94,605
Long term debt, net of current portion 7,673
7,562
Deferred revenue, net of current portion 227,998
256,778
Deferred tax liabilities, net 15,868
17,007
Other long term liabilities 5,747
3,868
Total liabilities 345,082
379,820
Commitments and contingencies (Note 16)

Total equity
Common stock, no par value, 200,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 120,624,346 and 118,688,770 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively —
—
Additional paid-in capital 1,370,917
1,325,780
Accumulated deficit (820,554 ) (729,341 )
Accumulated other comprehensive loss (16,750 ) (36,202 )
Total Intrexon shareholders' equity 533,613
560,237
Noncontrolling interests 19,566
9,011
Total equity 553,179
569,248
Total liabilities and total equity $ 898,261
$ 949,068


(Amounts in thousands, except share data)	March 31, 2021		December 31, 2020
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable	$	4,295	$	4,598
Accrued compensation and benefits	6,425		8,097
Other accrued liabilities	7,437		9,549
Deferred revenue	3,845		2,800

Current portion of long-term debt	359		360

Current portion of lease liabilities	2,658		2,657
Related party payables	52		19
Current liabilities held for sale or abandonment	172		14,047
Total current liabilities	25,243		42,127
Long-term debt, net of current portion	174,158		171,522

Deferred revenue, net of current portion, including $21,205 from related parties as of March 31, 2021 and December 31, 2020	23,023		23,023
Lease liabilities, net of current portion	6,943		7,744
Deferred tax liabilities	2,722		2,897
Other long-term liabilities	100		100
Total liabilities	232,189		247,413
Commitments and contingencies (Note 16)	0		0
Shareholders' equity
Common stock, 0 par value, 400,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 206,414,135 shares and 187,663,207 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively	0		0
Additional paid-in capital	2,013,757		1,886,567
Accumulated deficit	(1,840,708)		(1,823,390)
Accumulated other comprehensive income	1,746		3,997
Total shareholders' equity	174,795		67,174


Total liabilities and shareholders' equity	$	406,984	$	314,587

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

~~Intrexon Corporation~~

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


(Amounts in thousands, except share data)	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Balances at December 31, 2020	187,663,207	$	0	$	1,886,567	$	3,997	$	(1,823,390)	$	67,174
Stock-based compensation expense	—	—		5,415		—		—		5,415
Shares issued upon vesting of restricted stock units and for exercises of stock options	1,426,157	—		153		—		—		153

Shares issued as payment for services	74,771	—		577		—		—		577
Shares issued in public offering, net of issuance costs	17,250,000	—		121,045		—		—		121,045












Net loss	—	—		—		—		(17,318)		(17,318)

Other comprehensive loss	—	—		—		(2,251)		—		(2,251)
Balances at March 31, 2021	206,414,135	$	0	$	2,013,757	$	1,746	$	(1,840,708)	$	174,795

(Amounts in thousands, except share data) Common Stock
Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Loss

Accumulated
Deficit

Total
Intrexon
Shareholders'
Equity

Noncontrolling
Interests

Total
Equity
Shares Amount
Balances at December 31, 2016 118,688,770
$ —
$ 1,325,780
$ (36,202 ) $ (729,341 ) $ 560,237
$ 9,011
$ 569,248
Cumulative effect of adoption of ASU 2016-09 —
—
1,461
—
(1,461 ) —
—
—
Stock-based compensation expense —
—
31,914
—
—
31,914
35
31,949
Exercises of stock options 109,971
—
839
—
—
839
28
867
Shares issued as payment for services 439,200
—
8,440
—
—
8,440
—
8,440
Shares and warrants issued in acquisition 684,240
—
16,997
—
—
16,997
—
16,997
Shares issued to acquire noncontrolling interests 221,743
—
5,082
—
—
5,082
(5,995 ) (913 )
Shares issued as payment of deferred consideration 480,422
—
—
—
—
—
—
—
Adjustments for noncontrolling interests —
—
2,789
—
—
2,789
(2,802 ) (13 )
Noncash dividend —
—
(22,385 ) —
—
(22,385 ) 22,385
—
Net loss —
—
—
—
(89,752 ) (89,752 ) (3,123 ) (92,875 )
Other comprehensive income —
—
—
19,452
—
19,452
27
19,479
Balances at September 30, 2017 120,624,346
$ —
$ 1,370,917
$ (16,750 ) $ (820,554 ) $ 533,613
$ 19,566
$ 553,179


(Amounts in thousands, except share data)	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Balances at December 31, 2019	163,274,880	$	0	$	1,752,048	$	(27,468)	$	(1,652,869)	$	71,711
Stock-based compensation expense	—	—		4,372		—		—		4,372
Shares issued upon vesting of restricted stock units	668,786	—		—		—		—		—
Shares issued for accrued compensation	347,989	—		5,100		—		—		5,100
Shares issued as payment for services	392,483	—		930		—		—		930

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










Net loss	—	—		—		—		(55,998)		(55,998)
Release of cumulative translation adjustments to loss from discontinued operations	—	—		—		26,957		—		26,957
Other comprehensive loss	—	—		—		(843)		—		(843)
Balances at March 31, 2020	170,656,834	$	0	$	1,797,450	$	(1,354)	$	(1,708,867)	$	87,229

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

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


	Three Months Ended March 31,
(Amounts in thousands)	2021		2020
Cash flows from investing activities
Purchases of investments	$	(174,221)	$	(119,267)
Sales and maturities of investments	40,500		18,000





Purchases of property, plant and equipment	(1,014)		(3,152)
Proceeds from sale of assets	1,944		684
Proceeds from sale of discontinued operations, net of cash sold	0		64,240

Proceeds from repayment of notes receivable	3,689		2,942
Net cash used in investing activities	(129,102)		(36,553)
Cash flows from financing activities
Proceeds from issuance of shares, net of issuance costs	121,045		35,000

Advances from lines of credit	0		8,718
Repayments of advances from lines of credit	0		(9,435)

Payments of long-term debt	(116)		(132)
Proceeds from stock option exercises	111		0

Net cash provided by financing activities	121,040		34,151
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(11)		(39)
Net decrease in cash, cash equivalents, and restricted cash	(24,457)		(30,184)
Cash, cash equivalents, and restricted cash
Beginning of period	52,250		68,434
End of period	$	27,793	$	38,250
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	3,539	$	3,568
Cash paid during the period for income taxes	4		40
Significant noncash activities


Accrued compensation paid in equity awards	$	0	$	5,100
Purchases of property and equipment included in accounts payable and other accrued liabilities	255		369

Proceeds from sale of assets included in accounts receivable	23		0

Proceeds from stock option exercises included in other receivables	42		0

Nine Months Ended
September 30,
(Amounts in thousands) 2017 2016
Cash flows from investing activities
Purchases of investments —
(75,246 )
Maturities of investments 136,300
71,987
Purchases of equity securities, preferred stock and warrants (1,161 ) (2,308 )
Proceeds from sales of equity securities 235
—
Cash acquired in a business combination 2,054
—
Investments in affiliates (10,639 ) (9,415 )
Cash paid in asset acquisition (14,219 ) (7,244 )
Purchases of property, plant and equipment (32,675 ) (20,197 )
Proceeds from sale of property, plant and equipment 1,423
243
Issuance of note receivable (2,400 ) (2,964 )
Proceeds from repayment of note receivable 1,500
—
Net cash provided by (used in) investing activities 80,418
(45,144 )
Cash flows from financing activities
Acquisitions of noncontrolling interests (913 ) —
Advances from lines of credit 4,563
2,308
Repayments of advances from lines of credit (5,149 ) (2,320 )
Proceeds from long term debt 285
547
Payments of long term debt (385 ) (848 )
Payments of deferred consideration for acquisitions (8,678 ) (6,705 )
Proceeds from stock option exercises 867
18,180
Payment of stock issuance costs (10 ) —
Net cash provided by (used in) financing activities (9,420 ) 11,162
Effect of exchange rate changes on cash and cash equivalents 870
(313 )
Net increase (decrease) in cash and cash equivalents 1,609
(66,075 )
Cash and cash equivalents
Beginning of period 62,607
135,782
End of period $ 64,216
$ 69,707
Supplemental disclosure of cash flow information
Cash paid during the period for interest $ 534
$ 875
Cash paid during the period for income taxes 497
—
Significant noncash financing and investing activities
Stock received as consideration for collaboration agreements $ —
$ 18,766
Preferred stock received as consideration for collaboration amendments —
120,000
Stock and warrants issued in business combinations 16,997
—
Stock issued to acquire noncontrolling interest 5,082
—
Stock issued in asset acquisition —
4,401
Contingent consideration assumed in asset acquisition —
3,660
Noncash dividend to shareholders 22,385
—
Purchases of equipment included in accounts payable and other accrued liabilities 2,137
926
The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of March 31, 2021 and December 31, 2020 as shown above:


	March 31, 2021		December 31, 2020
Cash and cash equivalents	$	27,355	$	51,792


Restricted cash included in other assets	438		458
Cash, cash equivalents, and restricted cash	$	27,793	$	52,250

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

~~Intrexon Corporation~~

(Amounts in thousands, except share and per share data)

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

PGEN Therapeutics, Inc. ("PGEN Therapeutics") is a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cell therapies using ~~synthetic biology. Intrexon's primary domestic operations are~~precision technology to target urgent and intractable diseases in ~~California, Florida, Maryland,~~immuno-oncology, autoimmune disorders, and ~~Virginia, and its primary international operations are in Belgium and Hungary. There have been no commercialized products derived from Intrexon's collaborations to date.~~

~~Trans Ova Genetics, L.C. ("Trans Ova"), a provider of bovine reproductive technologies and other genetic processes to cattle breeders and producers,~~infectious diseases. PGEN Therapeutics is a wholly owned subsidiary of ~~Intrexon~~Precigen with primary operations in ~~Iowa, Maryland, Missouri, Oklahoma,~~Maryland.

Precigen ActoBio, Inc. ("ActoBio") is pioneering a proprietary class of microbe-based biopharmaceuticals that enable expression and ~~Texas.~~

~~Oxitec Limited ("Oxitec"), a pioneering company in biological insect control solutions,~~local delivery of disease-modifying therapeutics and is a wholly owned subsidiary of ~~Intrexon~~Precigen with primary operations in ~~England~~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 ~~Brazil.~~

~~Intrexon Produce Holdings, Inc. ("IPHI")~~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 ~~Intrexon. Okanagan Specialty Fruits, Inc. ("Okanagan")~~Precigen with primary operations in Iowa.

Trans Ova Genetics, L.C., ~~a company which developed~~including its wholly owned subsidiary Progentus, L.C., are providers of reproductive technologies, including services and ~~received regulatory approval for the world's first non-browning apple without the use of any flavor-altering chemical or antioxidant additives,~~products sold to cattle breeders and other producers and are hereinafter collectively referred to as "Trans Ova." Trans Ova is a wholly owned subsidiary ~~of IPHI~~ with primary operations in ~~Canada. Fruit Orchard Holdings, Inc. ("FOHI") is~~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 ~~IPHI~~2020, the Company suspended MBP Titan's operations and began the process to wind down MBP Titan's activities and had substantially completed the wind down by December 31, 2020, with ~~primary~~the final disposition of certain property and equipment and the facility operating lease occurring in January 2021. 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 ~~in Washington.~~for all periods presented. See Note 3 for further discussion.

~~ViaGen, L.C.~~On January 31, 2020, Precigen completed the sale of the majority of its non-healthcare assets and operations to an affiliate of Third Security, LLC ("~~ViaGen"~~Third Security"), a ~~provider of genetic preservation~~related party, which are presented as discontinued operations for the three months ended March 31, 2020. See Notes 3 and ~~cloning technologies, and Exemplar Genetics, LLC ("Exemplar"), a provider of genetically engineered swine~~13 for ~~medical and genetic research, are wholly owned subsidiaries with primary operations in Texas and Iowa, respectively.~~

In March 2017, Intrexon acquired the remaining 49% of the equity of Biological & Popular Culture, Inc. ("BioPop"), a California company developing artwork, children's toys and novelty goods that are derived from living organisms or enabled by synthetic biology for $900 in cash and 221,743 shares of Intrexon common stock valued at $5,082. Upon closing this transaction, BioPop became a wholly owned subsidiary of Intrexon.

As of September 30, 2017, Intrexon owned approximately 58% of AquaBounty Technologies, Inc. ("AquaBounty"), a company focused on improving productivity in commercial aquaculture. In January 2017, in conjunction with the listing by AquaBounty of their common stock on the NASDAQ Stock Market, Intrexon purchased $25,000 of additional AquaBounty common stock and subsequently distributed shares of AquaBounty common stock as a dividend to Intrexon shareholders. See Note 14 for additionalfurther discussion.

~~Intrexon Corporation~~Precigen and its consolidated subsidiaries are hereinafter referred to as the "Company."

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Certain information and footnote disclosures normally included in the Company's annual financial statements have been condensed or omitted. These interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for fair statement of the Company's financial position as of ~~September 30, 2017~~March 31, 2021 and results of operations and cash flows for the interim periods ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020. The year-end condensed consolidated balance sheet data was derived from the Company's audited financial statements but does not include all disclosures required by U.S. GAAP. These interim financial results are not necessarily indicative of the results to be expected for the year ending December 31, ~~2017,~~2021, or for any other future annual or interim period. The accompanying interim unaudited condensed consolidated financial statements should

be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

The accompanying condensed consolidated financial statements reflect the operations of ~~the Company~~Precigen and its subsidiaries. All intercompany accounts and transactions have been eliminated.

~~Investments~~Liquidity

Management believes that existing liquid assets as of March 31, 2021 will allow the Company to continue its operations for at least a year from the issuance date of these condensed consolidated financial statements. These condensed consolidated financial statements are presented in ~~Preferred Stock~~United States dollars. The Company is subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of product candidates. Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development, and clinical manufacturing of its and its collaborators' product candidates. Additionally, the accompanying condensed 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 three months ended March 31, 2021, the Company incurred a net loss of $17,318 and, as of March 31, 2021, had an accumulated deficit of $1,840,708. 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 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.

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, the Company 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 recruitment in the study resumed. 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, there is uncertainty regarding the duration and severity of the ongoing pandemic, and the Company could experience further delays or other pandemic-related events that may adversely impact the Company's clinical as well as preclinical pipeline candidates in the future.

The Company ~~holds preferred stock in certain~~is closely monitoring the impact of COVID-19 on these and other aspects of its ~~collaborators which may be converted to common stock as described in Note 7. The Company elected~~business, including Trans Ova and Exemplar. Given the ~~fair value option to account for its investments in preferred stock whereby~~dynamic nature of these circumstances, the value of preferred stock is adjusted to fair value as of each reporting date and unrealized gains and losses are reported in the consolidated statement of operations. These investments are subject to fluctuation in the future due to, among other things, the likelihood and timing of conversionfull impact of the ~~preferred stock into common stock,~~COVID-19 pandemic on the ~~volatility~~Company's ongoing business, results of ~~each collaborator's common stock,~~operations, and ~~changes~~overall financial performance in ~~general economic~~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 ~~conditions~~position, including resulting impairments to goodwill and long-lived assets and additional credit losses.

See Note 3 for further discussion of the ~~collaborators. The investments are classified as noncurrent in the consolidated balance sheet since the Company does not intend to sell the investments nor expect them to be converted into shares~~impact of ~~common stock within one year.~~

~~Until such time as the Company converts the preferred stock into common stock, the Company is entitled to monthly dividends and records dividend income as described in Note 7.~~COVID-19 on MBP Titan.

Equity Method Investments

The Company accounts for its investments in each of its joint ventures ("JVs") and accounted for its investments in start-up entities backed by the Harvest Intrexon Enterprise Fund I, LP ("Harvest"), aall of which are related ~~party, (Note 17)~~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.~~

~~The Company accounts for its investment in Oragenics, Inc. ("Oragenics"), one of its collaborators, using the fair value option. The fair value~~See additional discussion related to certain of the Company's ~~investment~~JVs in ~~Oragenics was $5,634~~Note 4 and $7,244 as of September 30, 2017 and December 31, 2016, respectively, and is included as equity securities in the accompanying consolidated balance sheets. The Company's ownership of Oragenics was 29.4% and 29.5% as of September 30, 2017 and December 31, 2016, respectively. Unrealized appreciation (depreciation) in the fair value of these securities was $827 and $(455) for the three months ended September 30, 2017 and 2016, respectively, and was $(1,610) and $(11,597) for the nine months ended September 30, 2017 and 2016, respectively. See Note 19 for additional discussion ~~regarding Oragenics.~~

~~Summarized financial data as~~related to certain of ~~September 30, 2017 and December 31, 2016 and for~~ the ~~three and nine months ended September 30, 2017 and 2016, for the Company's equity method investments are shown~~Harvest start-up entities in ~~the following tables.~~Note 16.

September 30,
2017 December 31,
2016
Current assets $ 68,021
$ 77,761
Non-current assets 12,856
11,040
Total assets 80,877
88,801
Current liabilities 9,032
11,588
Non-current liabilities 2,400
—
Total liabilities 11,432
11,588
Net assets $ 69,445
$ 77,213

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Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Revenues $ 58
$ 65
$ 175
$ 394
Operating expenses 9,693
18,363
33,128
50,406
Operating loss (9,635 ) (18,298 ) (32,953 ) (50,012 )
Other (145 ) 75
37
1,502
Net loss $ (9,780 ) $ (18,223 ) $ (32,916 ) $ (48,510 )

Variable Interest Entities

As of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, the Company determined that ~~certain of~~ its ~~collaborators and joint ventures as well as Harvest~~JVs were variable interest entities ("~~VIE" or "VIEs"~~VIEs"). 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~~As of ~~these VIEs as of September 30, 2017~~March 31, 2021 and December 31, ~~2016 were $187,555 and $159,115, respectively, which represents~~2020, the ~~Company's maximum~~Company had 0 risk of loss related to the identified VIEs. See Note 4 for discussion of the Company's future funding commitments for its significant JVs.

~~Self-insurance Reserves~~Segment Information

~~Effective January~~The Company's chief operating decision maker ("CODM") regularly reviews disaggregated financial information for various operating segments. Starting in the first quarter of 2021, the financial information regularly reviewed by the CODM was revised and the operating segments, which were determined to be operating and reportable segments, were (i) Biopharmaceuticals, (ii) Exemplar, and (iii) Trans Ova. The legal entities of PGEN Therapeutics and ActoBio, as well as the Company's majority owned subsidiary Triple-Gene LLC and its partnered program with Castle Creek Biosciences, Inc. ("Castle Creek"), represent the Biopharmaceuticals reportable segment as these businesses share resources and the CODM manages these operations as a group. See Note 1 ~~2017, the Company commenced a self-insurance program~~ for a ~~significant portion~~description of ~~its employee health benefit programs. The Company maintains stop-loss coverage with third party insurers to limit its individual claims~~PGEN Therapeutics, ActoBio, Exemplar, and ~~total exposure under those programs. The Company estimates its accrued liability for the ultimate costs to close known claims, including claims incurred but~~Trans Ova. Corporate expenses, which are not ~~yet reported~~allocated to the ~~Company, as~~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, gain or loss on disposals of assets, stock-based compensation expense, loss on settlement agreement, and equity in net loss of affiliates. As a result of the balance sheet date. The Company's recorded estimated liability for self-insurance is based on the insurance company's incurred loss estimates and management's judgment, including assumptions and factors related to the frequency and severity of claims and the Company's claims development history.

~~The assessment of self-insurance reserves is a highly subjective process that requires judgments about future events. Self-insurance reserves are reviewed at least quarterly to determine the adequacy~~revision of the ~~accruals and related financial statement disclosure. The ultimate settlement of self-insurance reserves may differ significantly from amounts~~reportable segments, the Company has ~~accrued in~~restated its ~~consolidated financial statements.~~

~~Segment Information~~

~~While~~historical segment presentation to conform to the Company generates revenues from multiple sources, including collaboration agreements, licensing, and products and services associated with bovine reproduction, management is organized around a singular research and development focus torevised segment determination. See Note 19 for further ~~the development~~discussion of the Company's underlying synthetic biology technologies. Accordingly, the Company has determined that it operates in one segment. As of September 30, 2017 and December 31, 2016, the Company had $19,335 and $13,265, respectively, of long-lived assets in foreign countries. The Company recognized revenues derived in foreign countries totaling $4,448 and $3,502 for the three months ended September 30, 2017 and 2016, respectively, and $11,773 and $8,678 for the nine months ended September 30, 2017 and 2016, respectively.segments.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

In ~~January 2017,~~December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2017-01,~~ ~~Business Combinations~~2019-12, Income Taxes (Topic ~~805) - Clarifying~~740): Simplifying the ~~Definition of a Business~~Accounting for Income Taxes ("ASU ~~2017-01"~~2019-12"). The provisions of ASU ~~2017-01 clarify~~2019-12 are intended to simplify various aspects related to accounting for income taxes by removing certain exceptions to the ~~definition~~general principles in Accounting Standards Codification ("ASC") Topic 740 and clarifying certain aspects of ~~a business~~the current guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted this standard in the second quarter of 2017, and the implementation of this standard did not have a material impact on the Company's consolidated financial statements.

~~In October 2016, the FASB issued ASU 2016-17,~~ ~~Consolidation (Topic 810) - Interests Held through Related Parties That Are under Common Control~~ ~~("ASU 2016-17"). The provisions of ASU 2016-17 amend the consolidation guidance on how a~~promote consistency among reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE.entities. The Company adopted this standard effective January 1, ~~2017,~~2021, and ~~the implementation of this standard did not have a~~there was no material impact onto the ~~Company's~~accompanying consolidated financial statements.

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting~~ ("ASU 2016-09"). The provisions of ASU 2016-09 simplify various aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this standard effective January 1, 2017. Upon adoption in the first quarter of 2017, the Company elected to recognize forfeitures as they occur and recorded an opening

adjustment to additional paid-in capital and accumulated deficit for previously unrecognized stock-based compensation costs due to estimating forfeitures on unvested shares totaling $1,461. The Company also recognized deferred tax assets of approximately $17,900 related to the excess tax benefits that previously arose directly from tax deductions related to equity compensation greater than stock-based compensation costs recognized in the consolidated financial statements and the cumulative adjustment for forfeitures. These deferred tax assets were fully offset by a valuation allowance (Note 13). The adoption was on a modified retrospective basis and had no impact on prior periods.

~~In March 2016, the FASB issued ASU 2016-07,~~ ~~Investments-Equity Method and Joint Ventures (Topic 323) - Simplifying the Transition to the Equity Method of Accounting~~ ("ASU 2016-07"). The provisions of ASU 2016-07 eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an adjustment must be made to the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The Company adopted this standard effective January 1, 2017, and the implementation of this standard did not have a material impact on the Company's consolidated financial statements.

~~In July 2015, the FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330) - Simplifying the Measurement of Inventory~~ ("ASU 2015-11"). The provisions of ASU 2015-11 provide guidance for simplifying the calculation for subsequent measurement of inventory measured using the first-in-first-out or average cost methods. The Company adopted this standard effective January 1, 2017, and the implementation of this standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

In ~~July 2017,~~August 2020, the FASB issued ASU ~~2017-11,~~ Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception ("ASU 2017-11"). The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity's own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share ("EPS") in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, ~~Debt-Debt~~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")~~, including related EPS guidance (in Topic 260)~~. The provisions of ASU 2020-06 simplify accounting for convertible instruments by removing major separation models required under current U.S. GAAP. 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 ~~Part II of~~ ASU ~~2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now~~2020-06 are ~~presented as pending content in the FASB codification, to a scope exception. Those amendments do not have an accounting effect. The guidance is~~ effective for ~~annual periods and interim periods within those~~ annual periods beginning after December 15, 2018, with early adoption permitted, and is effective for the Company for the year ended December 31, 2019. The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation-Stock Compensation (Topic 718) – Scope of Modification Accounting~~ ~~("ASU 2017-09")~~. The provisions of ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. An entity should account for the effects of a modification unless (a) the fair value of the modified award is the same as the fair value of the original award, (b) the vesting conditions of the modified award are the same as the vesting conditions of the original award and (c) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted,2021, and is effective for the Company for the year ending December 31, 2018. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. As this standard is prospective in nature, the impact to the Company's consolidated financial statements will depend on the nature of any future award modifications. The Company does not intend to early adopt this standard.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~ ("ASU 2017-04"). The provisions of ASU 2017-04 simplify how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, with early adoption permitted, and is effective for the Company for the year ending December 31, 2020.2022. The Company is currently evaluating the impact ~~that~~of the ~~implementation of this~~new standard ~~will have~~ on ~~the Company's~~its consolidated financial statements.

~~In November 2016,~~

3. Discontinued Operations

MBP Titan

As a result of market uncertainty driven by the ~~FASB issued ASU 2016-18,~~ ~~Statement of Cash Flows (Topic 230) - Restricted Cash (A Consensus~~COVID-19 pandemic and the state of the ~~FASB Emerging Issues Task Force)~~ ("ASU 2016-18"). The provisions of ASU 2016-18 require amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the total beginning and ending balancesenergy sector raising significant challenges for the ~~periods presented on~~strategic alternatives pursued by MBP Titan, beginning in the ~~statement~~second quarter of ~~cash flows. The guidance is effective for annual periods~~2020 and ~~interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted, and is effective for~~throughout the remainder of 2020, the Company ~~for the year ending~~suspended MBP Titan's operations, preserved certain of MBP Titan's intellectual property,

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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 completed by December 31, ~~2018.~~2020, with the final disposition of certain property and equipment and the facility operating lease occurring in January 2021. This discontinuation of operations represented the continuation of a strategic shift to becoming a primarily healthcare company advancing technologies and products that address complex healthcare challenges that the Company commenced as part of the Transactions defined and discussed below. The ~~implementation~~assets, liabilities, and expenses related to the discontinued operations of ~~this standard is not expected to have a material impact on~~MBP Titan are reclassified and presented as discontinued operations in the ~~Company's~~accompanying condensed consolidated financial ~~statements.~~

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows(Topic 230) - Classification of Certain Cash Receipts and Cash Payments~~ ("ASU 2016-15"). The provisions of ASU 2016-15 address eight specific cash flow issues and how those certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, ~~Statement of Cash Flows~~, and other Topics. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted, and is effective for the Company for the year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~ ("ASU 2016-02"). The provisions of ASU 2016-02 set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liabilitystatements for all ~~leases with a term~~periods.

The January 2021 sale of ~~greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for~~property and equipment resulted in a ~~similar manner as under existing guidance for operating leases today. ASU 2016-02 supersedes the previous lease standard, Topic 840,~~ ~~Leases~~. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018, and is effective for the Company for the year ending December 31, 2019. The Company is currently evaluating the impact that the implementation of this standard will havegain on ~~the Company's consolidated financial statements.~~

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities~~ ("ASU 2016-01"). The provisions of ASU 2016-01 make targeted improvements to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information, including certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2017, and is effective for the Company for the year ending December 31, 2018. The Company is currently evaluating the impact that the implementation of this standard will have on the Company's consolidated financial statements.

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ ("ASU 2014-09"). The FASB issued ASU 2014-09 to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. This guidance was originally effective for annual periods and interim periods within those annual periods beginning after December 15, 2016 and early adoption was not permitted. In August 2015, the FASB issued ASU 2015-14, ~~Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date~~, which deferred the effective date of the guidance in ASU 2014-09 by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016, and is effective for the Company for the year ending December 31, 2018. In 2016 and 2017, the FASB clarified the implementation guidance on principal versus agent, identifying performance obligations, licensing, narrow-scope improvements, practical expedients, and to expedite improvements to ASU 2014-09 by issuing ASU 2016-08, ~~Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations, ASU 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing, and ASU 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients, ASU 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, and ASU 2017-13,~~ ~~Revenue Recognition~~

~~(Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)~~. The Company continues to progress in the evaluation of its collaborations and licensing agreements and product and service revenue arrangements to determine the impact, if any, that the implementation of this standard will have on the Company's consolidated financial statements. The Company has completed its review of collaboration and licensing agreements and product and service revenue arrangements and plans to finalize its analysis in the fourth quarter of 2017 to determine the impact, if any, this standard may have on its financial position, results of operations and disclosures. Additionally, any revenue arrangements entered into subsequent to December 31, 2017 with financial or other significant terms which differ from the financial or other significant terms of the Company's existing revenue arrangements will be evaluated under this new standard.

~~3. Mergers and Acquisitions~~

~~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 $ 15,616
Warrants 1,381
Contingent consideration 585
$ 17,582

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 valuedisposal of assets ~~acquired and liabilities assumed at the acquisition date is shown below:~~

Cash and cash equivalents $ 2,054
Short term investments 542
Trade receivables 75
Other receivables 97
Prepaid expenses and other 227
Property and equipment 250
Intangible assets 14,000
Other non-current assets 58
Total assets acquired 17,303
Accounts payable 2,158
Accrued compensation and benefits 1,226
Other accrued expenses 856
Other long term liabilities 92
Deferred tax liabilities 239
Total liabilities assumed 4,571
Net assets acquired 12,732
Goodwill 4,850
Total consideration $ 17,582

~~The acquired intangible assets include developed technology, the fair value~~ of $464, 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.

~~As of September 30, 2017, the Company had incurred $519 of acquisition related costs, of which $9 and $507~~ is included in ~~selling, general and administrative expenses~~income from discontinued operations in the accompanying condensed consolidated ~~statements~~statement of operations for the three ~~and nine~~ months ended ~~September 30, 2017, respectively.~~

~~Condensed Pro Forma Financial Information~~

~~GenVec's results~~March 31, 2021. In January 2021, the Company executed termination and recapture agreements with the landlord of the leased facility used in MBP Titan's operations, ~~subsequent~~thereby relieving the Company of all of its obligations related to the ~~acquisition are~~facility that were originally due to expire in July 2025. This lease termination resulted in a gain of $4,602, which is included in income from discontinued operations in the accompanying condensed consolidated ~~statements~~statement of ~~income. The following condensed pro forma financial information~~operations for the three months ended ~~September 30, 2016~~March 31, 2021.

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, LLC ("Intrexon Energy Partners"), and Intrexon Energy Partners II, LLC ("Intrexon Energy Partners II"), including the associated deferred revenue remaining under each collaboration agreement (Notes 4 and 5), 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 condensed 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 sale or abandonment related to MBP Titan as of March 31, 2021 and December 31, 2020, are as follows:


	March 31, 2021		December 31, 2020
Assets

Property, plant and equipment, net	$	0	$	586



Right-of-use assets	0		9,131
Other assets	8		136
Total assets held for sale or abandonment	$	8	$	9,853
Liabilities

Lease liabilities, current	$	0	$	1,890
Other current liabilities	172		619

Lease liabilities, net of current portion	0		11,538

Total liabilities held for sale or abandonment	$	172	$	14,047

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


	Three Months Ended March 31,
	2021		2020

Operating (gains) expenses	$	(4,526)	$	9,096
Operating income (loss)	4,526		(9,096)




Income (loss) before income taxes	4,526		(9,096)

Income (loss) from discontinued operations	$	4,526	$	(9,096)

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The following table presents the significant noncash items, purchases of property, plant and equipment, and proceeds from sales of assets for the discontinued operations related to MBP Titan that are included in the accompanying condensed consolidated statements of cash flows.


	Three Months Ended March 31,
	2021		2020
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	$	0	$	1,011


Gain on disposal of assets	(464)		0




Stock-based compensation expense	0		78
Gain on lease termination (1)	(4,602)		0

Cash flows from investing activities

Purchases of property, plant and equipment	0		(72)
Proceeds from sales of assets	1,083		0

(1)Included in other noncash items on the accompanying condensed consolidated statement of cash flows.

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 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.;

•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; and

•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. ("Darling"), and related intellectual property rights to Darling for $12,200 (the "EnviroFlight Sale"). Unless referenced separately, the TS Biotechnology Sale and the ~~nine~~EnviroFlight Sale are collectively referred to as the "Transactions".

The Transactions were approved by the Company's independent members of the board of directors in December 2019. 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 operations related to the Transactions are reclassified and presented as discontinued operations in the accompanying condensed consolidated financial statements for all periods.

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.

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The following table presents the financial results of discontinued operations related to the Transactions for the three months ended ~~September 30, 2017~~March 31, 2020.


	Three Months Ended March 31, 2020
	TS Biotechnology Sale		EnviroFlight Sale		Total
Revenues (1)	$	1,294	$	0	$	1,294
Operating expenses	896		0		896
Operating income	398		0		398
Gain on sale of discontinued operations	633		39		672
Loss on release of cumulative foreign currency translation adjustment	(26,957)		0		(26,957)
Other expense, net	(129)		0		(129)
Equity in net loss of affiliates	—		(38)		(38)
Income (loss) before income taxes	(26,055)		1		(26,054)
Income tax expense	(2)		0		(2)
Income (loss) from discontinued operations	$	(26,057)	$	1	$	(26,056)

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

The following table presents the significant noncash items and ~~2016~~purchases of property, plant and equipment for the discontinued operations related to the Transactions that are included in the accompanying condensed consolidated statement of cash flows.


	Three Months Ended March 31, 2020
Adjustments to reconcile net loss to net cash used in operating activities



Gain on sale of discontinued operations	$	(672)
Loss on release of cumulative foreign currency translation adjustment	26,957
Unrealized depreciation on equity securities	106
Equity in net loss of EnviroFlight	38
Stock-based compensation expense	(1,346)

Cash flows from investing activities

Purchases of property, plant and equipment	(382)

Also see Note 13 below.

Equity Method Investments

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

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Summarized financial data for EnviroFlight is ~~presented~~shown in the following table for the period in which the Company held the equity method investment.


	Three Months Ended March 31, 2020
Revenues	$	16
Operating expenses	92
Operating loss	(76)

Net loss	$	(76)

Out-of-Period Adjustment

During the three months ended March 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 ifan 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 ~~acquisition had~~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 results of operations for the three months ended March 31, 2020.

Where applicable, the notes to the accompanying condensed consolidated financial statements have been ~~consummated on January 1, 2016:~~updated to reflect information pertaining to the Company's continuing operations.

Three Months Ended
September 30,
Nine Months Ended
September 30,
2016
2017
2016
Pro forma
Revenues $ 49,158
$ 154,185
$ 145,413
Loss before income taxes (31,954 ) (102,305 ) (153,868 )
Net loss (31,536 ) (100,330 ) (150,389 )
Net loss attributable to the noncontrolling interests 1,029
3,123
2,887
Net loss attributable to Intrexon (30,507 ) (97,207 ) (147,502 )

4. Investments in Joint Ventures

~~S & I Ophthalmic~~

In September 2013, the Company entered into a Limited Liability Company Agreement ("Sun LLC Agreement") with Caraco Pharmaceutical Laboratories, Ltd. ("Sun Pharmaceutical Subsidiary"), an indirect subsidiary of Sun Pharmaceutical Industries Ltd. ("Sun Pharmaceutical"), an international specialty pharmaceutical company focused on chronic diseases, to form S & I Ophthalmic, LLC ("S & I Ophthalmic"). The Sun LLC Agreement governs the affairs and the conduct of business of S & I Ophthalmic. S & I Ophthalmic leverages experience and technology from both the Company and Sun Pharmaceutical. Both the Company and Sun Pharmaceutical Subsidiary made an initial capital contribution of $5,000 in October 2013 for a 50% membership interest in S & I Ophthalmic. S & I Ophthalmic is governed by a board of managers ("S & I Ophthalmic Board") which has four members, two each from the Company and Sun Pharmaceutical Subsidiary. In cases in which the S & I Ophthalmic Board determines that additional capital contributions are necessary in order for S & I Ophthalmic to conduct business and comply with its obligations, each of the Company and Sun Pharmaceutical Subsidiary has committed to making additional capital contributions to S & I Ophthalmic subject to certain limits defined in the Sun LLC Agreement. Each has the right, but not the obligation, to make additional capital contributions above the defined limits when and if solicited by the S & I Ophthalmic Board. In 2015, both the Company and Sun Pharmaceutical Subsidiary made subsequent capital contributions of $5,000.

Beginning on the seventh anniversary of the effective date of the Sun LLC Agreement, and upon the second anniversary thereafter, the Company, as well as Sun Pharmaceutical Subsidiary, may make a cash offer to purchase all of the other party's interest in S & I Ophthalmic. Upon receipt of such an offer, the other party must either agree to tender its interests at the offered price or submit a counteroffer at a price higher than the original offer. Such offer and counteroffer may continue until one party agrees to the other's price.

The Company's investment in S & I Ophthalmic was $2,621 and $3,236 as of September 30, 2017 and December 31, 2016, respectively, and is included in investments in affiliates in the accompanying consolidated balance sheets.

~~OvaXon~~

In December 2013, the Company and OvaScience, Inc. ("OvaScience"), a life sciences company focused on the discovery, development, and commercialization of new treatments for infertility, entered into a Limited Liability Company Agreement ("OvaXon LLC Agreement") to form OvaXon, LLC ("OvaXon"), a joint venture to create new applications for improving human and animal health. Both the Company and OvaScience made an initial capital contribution of $1,500 in January 2014 for a 50% membership interest in OvaXon. OvaXon is governed by the OvaXon board of managers ("OvaXon Board") which has four members, two each from the Company and OvaScience. In cases in which the OvaXon Board determines that additional capital contributions are necessary in order for OvaXon to conduct business and comply with its obligations, each of the Company and OvaScience has the right, but not the obligation, to make additional capital contributions to OvaXon subject to the OvaXon LLC Agreement. Through September 30, 2017, both the Company and OvaScience have made subsequent capital contributions of $3,800.

The Company's investment in OvaXon was $(401) and $65 as of September 30, 2017 and December 31, 2016, respectively, and is included in other accrued liabilities and investments in affiliates, respectively, in the accompanying consolidated balance sheets.

Intrexon Energy Partners

In March 2014, the Company and certain investors (the "IEP Investors"), including an affiliate of Third Security, ~~LLC ("Third Security"),~~ entered into a Limited Liability Company Agreement ~~which~~that governs the affairs and conduct of business of Intrexon Energy Partners, ~~LLC ("Intrexon Energy Partners"),~~ a ~~joint venture~~JV formed to optimize and scale-up the Company's ~~gas-to-liquid~~methane bioconversion platform technology for the production of certain fuels and lubricants. The Company also entered into an ~~ECC~~exclusive channel collaboration ("ECC") with Intrexon Energy Partners providing exclusive rights to the Company's technology for the use in bioconversion for the production of certain fuels and lubricants, as a result of which the Company received a technology access fee of $25,000 while retaining a 50% membership interest in Intrexon Energy Partners. The IEP Investors made initial capital contributions, totaling $25,000 in the aggregate, in exchange for pro rata membership interests in Intrexon Energy Partners totaling 50%. In addition, ~~Intrexon~~Precigen has committed to make capital contributions of up to $25,000, and the IEP Investors, as a group and pro rata in accordance with their respective membership interests in Intrexon Energy Partners, have committed to make additional capital contributions of up to $25,000, at the request of Intrexon Energy Partners' board of managers (the "Intrexon Energy Partners Board") and subject to certain limitations. As of ~~September 30, 2017,~~March 31, 2021, the Company's remaining commitment was ~~$6,011.~~$4,225. Intrexon Energy Partners is governed by the Intrexon Energy Partners Board, which has ~~five~~5 members. ~~Two~~NaN members of the Intrexon Energy Partners Board are designated by the

Company and ~~three~~3 members are designated by a majority of the IEP Investors. The Company and the IEP Investors have the right, but not the obligation, to make additional capital contributions above the initial limits when and if solicited by the Intrexon Energy Partners Board.

The Company's investment in Intrexon Energy Partners was ~~$144~~$(428) and ~~$(477)~~$(425) as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, respectively, and is included in ~~investments in affiliates and~~ other accrued liabilities ~~respectively,~~ in the accompanying condensed consolidated balance ~~sheets.~~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

In December 2015, the Company and certain investors (the "IEPII Investors"), including Harvest, entered into a Limited Liability Company Agreement ~~which~~that governs the affairs and conduct of business of Intrexon Energy Partners II, ~~LLC ("Intrexon Energy Partners II"),~~ a ~~joint venture~~JV formed to

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utilize the Company's ~~natural gas~~methane bioconversion platform technology for the production of 1,4-butanediol, an industrial chemical used to manufacture spandex, polyurethane, plastics, and polyester. The Company also entered into an ECC with Intrexon Energy Partners II ~~which~~that provides exclusive rights to the Company's technology for use in the field, as a result of which the Company received a technology access fee of $18,000 while retaining a 50% membership interest in Intrexon Energy Partners II. The IEPII Investors made initial capital contributions, totaling $18,000 in the aggregate, in exchange for pro rata membership interests in Intrexon Energy Partners II totaling 50%. In December 2015, the owners of Intrexon Energy Partners II made a capital contribution of $4,000, half of which was paid by the Company. ~~Intrexon~~Precigen has committed to make additional capital contributions of up to $10,000, and the IEPII Investors, as a group and pro rata in accordance with their respective membership interests in Intrexon Energy Partners II, have committed to make additional capital contributions of up to $10,000, at the request of Intrexon Energy Partners II's board of managers (the "Intrexon Energy Partners II Board") and subject to certain limitations. As of March 31, 2021, the Company's remaining commitment was $10,000. Intrexon Energy Partners II is governed by the Intrexon Energy Partners II Board, which has ~~five~~5 members. ~~One~~NaN member of the Intrexon Energy Partners II Board is designated by the Company and ~~four~~4 members are designated by a majority of the IEPII Investors. The Company and the IEPII Investors have the right, but not the obligation, to make additional capital contributions above the initial limits when and if solicited by the Intrexon Energy Partners II Board.

The Company's investment in Intrexon Energy Partners II was ~~$698 and $1,414~~$(435) as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016, respectively,~~2020, and is included in ~~investments in affiliates~~other accrued liabilities in the accompanying condensed consolidated balance ~~sheets.~~

~~EnviroFlight~~

In February 2016, the Company entered into a series of transactions involving EnviroFlight, LLC ("Old EnviroFlight"), Darling Ingredients Inc. ("Darling") and a newly formed venture between the Company and Darling ("New EnviroFlight"). The Company determined that the series of integrated transactions to acquire substantially all of the assets of Old EnviroFlight for cash, common stock, and contingent consideration should be accounted for as a single transaction,sheets, which ~~constituted a business, and considered New EnviroFlight to be the accounting acquirer. Consideration paid to Old EnviroFlight was $4,244 in cash, 136,340 shares of~~represents the Company's common stock valued at $4,401 and contingent consideration estimated at $3,660. Contemporaneously, all the assets acquired from Old EnviroFlight, with the exception of certain developed technology, and $3,000 of cash were contributed to New EnviroFlightequity in ~~exchange~~losses for ~~a non-controlling, 50% membership interest in New EnviroFlight. The Company's~~contractually committed contributions to ~~New EnviroFlight included an exclusive license to~~Intrexon Energy Partners II.

See Notes 3 and 16 for additional discussion regarding the developed technology that was retained by the Company. Darling received the remaining 50% membership interest in New EnviroFlight as consideration for terminating rights previously held in the developed technology with Old EnviroFlight. New EnviroFlight was formed to generate high-nutrition, low environmental impact animal and fish feed, as well as fertilizer products. The Company and Darling as members have each agreed to make additional capital contributions of up to $5,000 to fund ongoing operations of New EnviroFlight. As of September 30, 2017, the Company's remaining commitment was $250. All of the employees of Old EnviroFlight became employees of New EnviroFlight.

The Company determined that its investment in New EnviroFlight should be accounted for using the equity method of accounting. The Company recorded an estimated fair value of $5,425 for its investment in New EnviroFlight and $9,880 for the retained developed technology intangible asset. The developed technology is being amortized over a period of twenty-one years. The contingent consideration liability payable to the members of Old EnviroFlight is considered a freestanding financial instrument and is recorded at fair value each reporting period. New EnviroFlight met a regulatory milestone, as defined in the asset purchase agreement, and the members of Old EnviroFlight received a portion of the contingent consideration consisting of 59,337 shares of the Company's common stock valued at $1,583 in October 2016. The members of Old EnviroFlight may receive up to $4,000 of additional shares of the Company's common stock if certain commercial milestones are met prior to February 2019. The value of this liability was estimated at $2,326 as of September 30, 2017 (Note 8).

The Company's investment in New EnviroFlight was $7,687 and $4,189 as of September 30, 2017 and December 31, 2016, respectively, and is included in investments in affiliates in the accompanying consolidated balance sheets.

~~Intrexon T1D Partners~~

In March 2016, the Company and certain investors (the "T1D Investors"), including affiliates of Third Security, entered into a Limited Liability Company Agreement which governs the affairs and conduct of business of Intrexon T1D Partners, LLC ("Intrexon T1D Partners"), a joint venture formed to utilize the Company's proprietary ActoBiotics platform to develop and commercialize products to treat type 1 diabetes. The Company also entered into an ECC with Intrexon T1D Partners which provides the exclusive rights to the Company's technology for use in the field, as a result of which the Company received a technology access fee of $10,000 while retaining a 50% membership interest in Intrexon T1D Partners. 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%. Intrexon has 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, have committed to make additional capital contributions of up to $5,000, at the request of Intrexon T1D Partners' board of managers (the "Intrexon T1D Partners Board") and subject to certain limitations. As of September 30, 2017, the Company's remaining commitment was $2,900. Intrexon T1D Partners is governed by the Intrexon T1D Partners Board, which has five members. Two members of the Intrexon T1D Partners Board are designated by the Company and three members are designated by a majority of the T1D Investors. The Company and the T1D Investors have the right, but not the obligation, to make additional capital contributions above these limits when and if solicited by the Intrexon T1D Partners Board.

~~The~~ Company's investment in Intrexon ~~T1D~~Energy Partners ~~was $51 and $806 as of September 30, 2017 and December 31, 2016, respectively, and is included in investments in affiliates in the accompanying consolidated balance sheets.~~II.

5. Collaboration and Licensing Revenue

~~The~~Historically, the Company ~~generates~~has derived collaboration and licensing revenue through ~~contractual~~ agreements with ~~collaborators (known as exclusive channel collaborations, "ECC" or "ECCs") and licensing agreements whereby~~counterparties for the ~~collaborators or the licensees 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. Upfront and milestone payments are typically deferred and recognized over the expected life of~~enabled by the Company's technology ~~platform using~~platforms. These collaborations and licensing agreements may provide for multiple promises to be satisfied by the Company and typically include a ~~straight-line approach.~~ 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. Options to acquire additional services are considered to determine if they constitute material rights. At contract inception, the transaction price is typically the upfront payment received and is allocated to the performance obligations. The Company has determined the transaction price should be recognized as revenue based on its measure of progress under the agreement primarily based on inputs necessary to fulfill the performance obligation.

The Company recognizes the reimbursement payments received for research and development ~~services~~efforts in the period ~~in which~~when the services are performed, in connection with the single performance obligation discussed above. The reimbursements relate specifically to the Company's efforts to provide services, and ~~collection~~the reimbursements are consistent with what the Company would typically charge other collaborators for similar services. The Company assesses the uncertainty of when and if any milestones will be achieved to determine whether the milestone is ~~reasonably assured.~~ included in the transaction price. The Company then assesses whether the revenue is constrained based on whether it is probable that a significant reversal of revenue would not occur when the uncertainty is resolved. Royalties, including sales-based milestones, received under the agreements will be recognized as revenue when sales have occurred because the Company applies the sales- or usage-based royalties recognition exception provided for under ASC Topic 606. The Company determined the application of this exception is appropriate because at the time the royalties are generated, the technology license granted in the agreement is the predominant item to which the royalties relate.

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.

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The following ~~tables summarize~~table summarizes the amounts recorded as revenue in the condensed consolidated statements of operations for each significant counterparty to a collaboration or licensing agreement for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016.~~2020.


	Three Months Ended March 31,
	2021		2020
ZIOPHARM Oncology, Inc.	$	0	$	100
Oragenics, Inc.	0		198


Castle Creek Biosciences, Inc.	59		10,363
Other	7		60
Total (1)	$	66	$	10,721

Three Months Ended September 30, 2017
Revenue Recognized From Total
Upfront and Milestone Payments Research and Development Services
ZIOPHARM Oncology, Inc. $ 4,843
$ 5,530
$ 10,373
Oragenics, Inc. 262
213
475
Fibrocell Science, Inc. 604
1,079
1,683
Genopaver, LLC 68
1,354
1,422
S & I Ophthalmic, LLC —
376
376
OvaXon, LLC —
262
262
Intrexon Energy Partners, LLC 625
1,278
1,903
Persea Bio, LLC 125
141
266
Ares Trading S.A. 1,597
759
2,356
Intrexon Energy Partners II, LLC 500
316
816
Intrexon T1D Partners, LLC 287
1,175
1,462
Harvest start-up entities (1) 616
3,404
4,020
Other 979
1,762
2,741
Total $ 10,506
$ 17,649
$ 28,155
(1)Collaboration and licensing revenues recognized for the three months ended March 31, 2021 and 2020, include the recognition of $66 and $10,384, respectively, associated with upfront and milestone payments which were previously deferred.


~~(1)~~	For the three months ended September 30, 2017, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; AD Skincare, Inc.; Genten Therapeutics, Inc.; and CRS Bio, Inc.

Three Months Ended September 30, 2016
Revenue Recognized From Total
Upfront and Milestone Payments Research and Development Services
ZIOPHARM Oncology, Inc. $ 4,843
$ 5,586
$ 10,429
Oragenics, Inc. 262
294
556
Fibrocell Science, Inc. 604
563
1,167
Genopaver, LLC 68
1,625
1,693
S & I Ophthalmic, LLC —
2,782
2,782
OvaXon, LLC —
709
709
Intrexon Energy Partners, LLC 625
4,230
4,855
Persea Bio, LLC 125
208
333
Ares Trading S.A. 1,597
719
2,316
Intrexon Energy Partners II, LLC 500
372
872
Intrexon T1D Partners, LLC 276
511
787
Harvest start-up entities (1) 425
868
1,293
Other 895
1,903
2,798
Total $ 10,220
$ 20,370
$ 30,590


~~(1)~~	For the three months ended September 30, 2016, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; and AD Skincare, Inc.

Nine Months Ended September 30, 2017
Revenue Recognized From Total
Upfront and Milestone Payments Research and Development Services
ZIOPHARM Oncology, Inc. $ 14,527
$ 16,795
$ 31,322
Oragenics, Inc. 786
733
1,519
Fibrocell Science, Inc. 1,814
3,561
5,375
Genopaver, LLC 205
4,410
4,615
S & I Ophthalmic, LLC —
751
751
OvaXon, LLC —
1,966
1,966
Intrexon Energy Partners, LLC 1,875
7,034
8,909
Persea Bio, LLC 375
446
821
Ares Trading S.A. 4,791
3,683
8,474
Intrexon Energy Partners II, LLC 1,500
1,421
2,921
Intrexon T1D Partners, LLC 823
3,059
3,882
Harvest start-up entities (1) 1,823
10,012
11,835
Other 3,735
3,259
6,994
Total $ 32,254
$ 57,130
$ 89,384


~~(1)~~	For the nine months ended September 30, 2017, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; AD Skincare, Inc.; Genten Therapeutics, Inc.; and CRS Bio, Inc.

Nine Months Ended September 30, 2016
Revenue Recognized From Total
Upfront and Milestone Payments Research and Development Services
ZIOPHARM Oncology, Inc. $ 6,687
$ 17,693
$ 24,380
Oragenics, Inc. 786
1,083
1,869
Fibrocell Science, Inc. 1,814
2,604
4,418
Genopaver, LLC 205
4,703
4,908
S & I Ophthalmic, LLC —
6,326
6,326
OvaXon, LLC —
2,211
2,211
Intrexon Energy Partners, LLC 1,875
11,180
13,055
Persea Bio, LLC 375
613
988
Ares Trading S.A. 4,791
2,148
6,939
Intrexon Energy Partners II, LLC 1,500
816
2,316
Intrexon T1D Partners, LLC 554
543
1,097
Harvest start-up entities (1) 776
1,890
2,666
Other 4,684
6,287
10,971
Total $ 24,047
$ 58,097
$ 82,144


~~(1)~~	For the nine months ended September 30, 2016, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; and AD Skincare, Inc.

There have been no significant changes to ~~arrangements~~the agreements with our collaborators and licensees in the ~~nine~~three months ended ~~September 30, 2017. See Note 5 in the Company's Annual Report on Form 10-K for the year ended December~~March 31, ~~2016 for additional details of the Company's existing collaboration and licensing agreements.~~2021.

Deferred Revenue

Deferred revenue primarily consists of consideration received for ~~upfront and milestone payments in connection with~~ the Company's ~~collaborations~~collaboration and licensing agreements. Deferred revenue consisted of the following:


	March 31, 2021		December 31, 2020
Collaboration and licensing agreements	$	23,354	$	23,420
Prepaid product and service revenues	3,301		2,126
Other	213		277
Total	$	26,868	$	25,823
Current portion of deferred revenue	$	3,845	$	2,800
Long-term portion of deferred revenue	23,023		23,023
Total	$	26,868	$	25,823

Revenue is recognized under collaboration and licensing agreements ~~prepayments for research and development~~as services ~~performed for collaborators and licensees, and prepayments for product and service revenues. Deferred revenue consists~~are performed. Certain of the ~~following:~~

September 30,
2017 December 31,
2016
Upfront and milestone payments $ 269,649
$ 297,867
Prepaid research and development services 1,718
6,015
Prepaid product and service revenues 4,869
5,554
Other 51
706
Total $ 276,287
$ 310,142
Current portion of deferred revenue $ 48,289
$ 53,364
Long-term portion of deferred revenue 227,998
256,778
Total $ 276,287
$ 310,142

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 March 31, 2021 and ~~licensing agreement.~~December 31, 2020, as well as the estimated remaining performance period as of March 31, 2021.


	Average Remaining Performance Period (Years)	March 31, 2021		December 31, 2020
Intrexon Energy Partners, LLC	3.0	$	8,362	$	8,362
Intrexon Energy Partners II, LLC	3.7	12,843		12,843
Castle Creek Biosciences, Inc.	0.8	320		379
Other	2.0	1,829		1,836
Total		$	23,354	$	23,420

September 30,
2017 December 31,
2016
ZIOPHARM Oncology, Inc. $ 124,282
$ 138,809
Oragenics, Inc. 6,980
7,766
Fibrocell Science, Inc. 17,212
19,026
Genopaver, LLC 1,772
1,977
Intrexon Energy Partners, LLC 16,250
18,125
Persea Bio, LLC 3,625
4,000
Ares Trading S.A. 42,387
47,178
Intrexon Energy Partners II, LLC 14,333
15,833
Intrexon T1D Partners, LLC 8,628
8,653
Harvest start-up entities (1) 18,953
20,208
Other 15,227
16,292
Total $ 269,649
$ 297,867


~~(1)~~	As of September 30, 2017 and December 31, 2016, the balance of deferred revenue for collaborations with Harvest start-up entities includes Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; AD Skincare, Inc.; Genten Therapeutics, Inc.; and CRS Bio, Inc.

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6. Short-term and Long-term Investments

The Company's investments are classified as available-for-sale. The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of ~~September 30, 2017:~~March 31, 2021:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Aggregate Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
U.S. government debt securities	$	44,000	$	2	$	(17	)	$	43,985	U.S. government debt securities	$	181,711	$	1	$	(36)	$	181,676
Corporate notes and bonds	242		—		—			242
Certificates of deposit	275		—		—			275		Certificates of deposit	265		0		0		265
Total	$	44,517	$	2	$	(17	)	$	44,502	Total	$	181,976	$	1	$	(36)	$	181,941

The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of December 31, ~~2016:~~2020:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
U.S. government debt securities	$	48,048	$	14	$	(1)	$	48,061
Certificates of deposit	264		0		0		264
Total	$	48,312	$	14	$	(1)	$	48,325

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Aggregate
Fair Value
U.S. government debt securities $ 180,412
$ 5
$ (94 ) $ 180,323
Certificates of deposit 272
—
—
272
Total $ 180,684
$ 5
$ (94 ) $ 180,595

~~For more information on the Company's method for determining the~~The estimated fair value of ~~its assets, see Note 2 – "Fair Value of Financial Instruments" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.~~

~~As of September 30, 2017, all of the~~ available-for-sale investments ~~were due within one year based on~~classified by their contractual ~~maturities.~~maturities as of March 31, 2021 was:


Due within one year	$	78,331
After one year through three years	103,610
Total	$	181,941

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 debt security 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 ~~September 30, 2017.~~March 31, 2021.

As of September 30, 2017 and December 31, 2016, the Company did not consider any of its investments to be other-than-temporarily impaired. When evaluating its 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.

7. ~~Investments in Preferred Stock~~

~~Investment in ZIOPHARM Preferred Stock~~

In June 2016, the Company received 100,000 shares of Series 1 Preferred Stock (the "Preferred Shares") of ZIOPHARM Oncology Inc. ("ZIOPHARM"), a related party, with a per share stated value of $1,200, as consideration for amending their two previously existing ECC agreements. A summary of the terms of the Preferred Shares follows.

~~Conversion.~~ The Preferred Shares shall automatically convert into shares of ZIOPHARM common stock upon the date the first approval in the United States of (i) a ZIOPHARM product, as defined in and developed under one of the ECC agreements, or (ii) a product, as defined and developed under the License and Collaboration Agreement with Ares Trading S.A., a subsidiary of the biopharmaceutical business of Merck KGaA, and ZIOPHARM, is publicly announced (the "Conversion Event Date"). The Preferred Shares shall convert into a number of shares of ZIOPHARM common stock equal to the stated value of such Preferred Share, divided by the greater of: (i) the volume weighted average closing price of ZIOPHARM's common stock over the twenty trading days ending on the Conversion Event Date or (ii) $1.00. The number of converted shares is subject to certain limitations defined in the amended and restated Certificate of Designation, Preferences, and Rights of Series 1 Preferred Stock (the "A&R Certificate of Designation").

~~Dividend Rights.~~ The Company shall receive a monthly dividend, payable in additional Preferred Shares, equal to $12.00 per Preferred Share held per month divided by the stated value of the Preferred Shares, which is referred to as the PIK Dividend. For any Preferred Shares that are not converted on the Conversion Event Date, the rate of PIK Dividend on these unconverted Preferred Shares will automatically increase from $12.00 to $24.00 per Preferred Share per month.

~~Voting Rights. The Preferred Shares do not have any voting rights except for certain protective voting rights defined in the A&R Certificate of Designation.~~

~~Liquidation Rights.~~ In the event of any voluntary or involuntary liquidation, dissolution or winding up of ZIOPHARM or a deemed liquidation event, as defined in the A&R Certificate of Designation, including a change of control or the sale, lease transfer, or exclusive license of all or substantially all of ZIOPHARM's assets, the holders of the Preferred Shares shall be entitled to receive a portion of all funds to be distributed in proportion to the holders' proportionate share of ZIOPHARM's common stock on an as-converted to common stock basis (the "Series 1 Liquidation Amount"). For purposes of calculating the Series 1 Liquidation Amount, if such liquidation event occurs prior to the Conversion Event Date, each Preferred Share shall be deemed to be convertible into the number of shares of ZIOPHARM's common stock equal to (i) the stated value of each Preferred Share, divided by (ii) the volume weighted average price of ZIOPHARM's common stock for the twenty day period ending on the date of the public announcement of the liquidation event. In addition, ZIOPHARM may elect to redeem the Preferred Shares in connection with or following a deemed liquidation event at a price per share equal to the Series 1 Liquidation Amount.

The investment in ZIOPHARM preferred stock is categorized as Level 3 as there are significant unobservable inputs and the Preferred Shares are not traded on a public exchange. The fair value of the investment in ZIOPHARM preferred stock is estimated using a probability-weighted expected return ("PWERM") model. The key inputs used in the PWERM model are (i) estimating the future returns for conversion of the Preferred Shares for both product approval and a change in control of ZIOPHARM (the "conversion events") using market data of the change in value for guideline companies as a result of these conversion events; (ii) estimating the expected date and likelihood of each conversion event; and (iii) discounting these estimated future returns using a discount rate for the Preferred Shares considering industry debt issuances originated by public funds and venture capital rates of return. A significant change in unobservable inputs discussed above could result in a

significant impact on the fair value of the Company's investment in ZIOPHARM preferred stock. The fair value of the Company's investment in ZIOPHARM preferred stock, including additional Preferred Shares received as dividends, was $146,637 and $129,545 as of September 30, 2017 and December 31, 2016, respectively. During the three and nine months ended September 30, 2017, the Company received 3,414 shares and 9,943 shares, respectively, of additional Preferred Shares and recognized $4,311 and $12,276, respectively, of dividend income in the accompanying consolidated statements of operations. During the three and nine months ended September 30, 2016, the Company received 3,063 shares of additional Preferred Shares and recognized $3,676 of dividend income in the accompanying consolidated statements of operations.

~~Investment in Fibrocell Preferred Stock~~

In March 2017, Fibrocell Science, Inc. ("Fibrocell"), one of the Company's collaborators and a related party, 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 498,843 shares of Fibrocell common stock, reflective of the 1-for-3 reverse stock split of Fibrocell's common stock effective March 10, 2017. The Convertible Preferred Shares are convertible at any time at the election of the Company and accrue dividends at 4% per annum, compounded quarterly, increasing the stated value of the shares. The investment in Fibrocell preferred stock is categorized as Level 3 as there are significant unobservable inputs and the Convertible Preferred Shares are not traded on a public exchange. The fair value of the investment in Fibrocell preferred stock is estimated using a conversion plus dividend approach utilizing the trading value of the underlying common stock and an estimated premium for the preferred stock dividend and other preferences. Market price volatility of Fibrocell's common stock and a significant change in the estimated preferred stock premium could result in a significant impact to the fair value of the investment in Fibrocell preferred stock. As of September 30, 2017, the fair value of the Company's investment in Fibrocell preferred stock totaled $1,862. See Note 17 for additional discussion of the warrants.

~~Changes in the Fair Value of Investments in Preferred Stock~~

~~The following table summarizes the changes in the Level 3 investments in preferred stock during the~~ ~~nine months ended September 30, 2017~~.

8. Fair Value Measurements

The carrying amount of cash and cash equivalents, ~~restricted cash,~~ receivables, ~~prepaid expenses and other current assets,~~ 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, at September 30, 2017:~~as of March 31, 2021:


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		March 31, 2021
Assets
U.S. government debt securities	$	0	$	181,676	$	0	$	181,676
Other	0		265		0		265
Total	$	0	$	181,941	$	0	$	181,941

Quoted Prices in Active Markets
(Level 1)

Significant Other Observable Inputs
(Level 2)

Significant Unobservable Inputs
(Level 3)
September 30,
2017
Assets
U.S. government debt securities $ —
$ 43,985
$ —
$ 43,985
Equity securities 19,830
6,812
—
26,642
Preferred stock —
—
148,499
148,499
Other —
7,089
—
7,089
Total $ 19,830
$ 57,886
$ 148,499
$ 226,215

Table of Contents


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2020
Assets
U.S. government debt securities	$	0	$	48,061	$	0	$	48,061
Other	0		264		0		264
Total	$	0	$	48,325	$	0	$	48,325

Quoted Prices in Active Markets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) December 31,
2016
Assets
U.S. government debt securities $ —
$ 180,323
$ —
$ 180,323
Equity securities 15,544
7,978
—
23,522
Preferred stock —
—
129,545
129,545
Other —
1,917
—
1,917
Total $ 15,544
$ 190,218
$ 129,545
$ 335,307

~~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.~~ The method used to estimate the fair value of the Level 2 short-term and long-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 method used to estimate the fair value of the Level 2 equity securities in the tables above is based on the quoted market price of the publicly-traded security, adjusted for a discount for lack of marketability. The methods used to estimate the fair value of the Level 3 assets are discussed in Note 7.

~~There were no transfers between levels of the fair value hierarchy during the nine months ended September 30, 2017.~~

The carrying values of the Company's ~~long term~~long-term debt, excluding the 3.50% convertible senior notes due 2023 (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 Company's contingent consideration liabilities (Notes 3 and 4) are measured on a recurring basis and were $2,911 and $2,081 at September 30, 2017 and December 31, 2016, respectively. 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 thecalculated fair value of the ~~Company's contingent consideration liabilities.~~Convertible Notes (Note 11) was approximately $176,000 and $165,000 as of March 31, 2021 and December 31, 2020, respectively, and is based on the recent third-party trades of the instrument as of the balance sheet date. 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. The changes in the fair value of the Convertible Notes is classified as Level ~~3 liabilities during~~2 within the ~~nine months ended September 30, 2017 were~~fair value hierarchy as ~~follows:~~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 condensed consolidated balance sheets at amortized cost, which was $170,898 and $168,147 as of March 31, 2021 and December 31, 2020, respectively.

Nine Months Ended
September 30, 2017
Beginning balance $ 2,081
Acquisition date fair value of contingent consideration liability (Note 3) 585
Change in fair value of contingent consideration recognized in selling, general and administrative expenses 245
Ending balance $ 2,911

Inventory consists of the following:


	March 31, 2021		December 31, 2020
Supplies, embryos and other production materials	$	2,085	$	2,060
Work in process	2,239		2,348
Livestock	4,860		5,047
Feed	1,453		1,904
Total inventory	$	10,637	$	11,359

September 30,
2017 December 31,
2016
Supplies, embryos and other production materials $ 2,185
$ 1,835
Work in process 4,618
5,466
Livestock 8,738
11,752
Feed 2,189
2,086
Total inventory $ 17,730
$ 21,139

~~10.~~9. Property, Plant and Equipment, Net

Property, plant and equipment consist of the following:

Depreciation expense was ~~$2,989~~$1,593 and ~~$2,332~~$1,920 for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, respectively, and $8,623 and $6,769 for the nine months ended September 30, 2017 and 2016,~~2020, respectively.

~~In June 2017, AquaBounty purchased a land-based aquaculture facility to be used in the production of its AquAdvantage salmon in Indiana for $14,219.~~

~~11.~~10. Goodwill and Intangible Assets, Net

The changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2017 are~~March 31, 2021 were as follows:


Balance at December 31, 2020	$	54,363

Foreign currency translation adjustments	(125)
Balance at March 31, 2021	$	54,238

Balance at December 31, 2016 $ 157,175
Acquisitions 4,850
Foreign currency translation adjustments 4,796
Balance at September 30, 2017 $ 166,821

~~No accumulated~~The Company had $43,643 of cumulative impairment losses ~~existed~~ as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016.~~2020.

Intangible assets consist of the following as of ~~September 30, 2017:~~March 31, 2021:

Intangible assets consist of the following as of December 31, ~~2016:~~2020:

Gross Carrying Amount Accumulated Amortization Net
Patents, developed technologies and know-how $ 236,401
$ (29,748 ) $ 206,653
Customer relationships 10,700
(4,672 ) 6,028
Trademarks 6,800
(1,792 ) 5,008
Covenant not to compete 370
(339 ) 31
In-process research and development 7,895
—
7,895
Total $ 262,166
$ (36,551 ) $ 225,615

The balance of in-process research and development includes certain in-process research and development technology acquired in the Company's acquisition of Oxitec in September 2015, and amortization will begin once certain regulatory approvals have been obtained for the in-process programs.


	Gross Carrying Amount		Accumulated Amortization		Net
Patents, developed technologies and know-how	$	96,927	$	(34,412)	$	62,515
Customer relationships	10,850		(9,340)		1,510
Trademarks	5,900		(4,529)		1,371
Total	$	113,677	$	(48,281)	$	65,396

Amortization expense was ~~$5,001~~$1,930 and ~~$3,651~~$1,879 for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, respectively, and $14,258 and $10,888 for the nine months ended September 30, 2017 and 2016,~~2020, respectively.

11. Lines of Credit and ~~Long Term~~Long-Term Debt

Trans Ova has a $5,000 revolving line of credit with First National Bank of Omaha ~~which~~that matures on ~~May~~April 1, ~~2018.~~2022. The line of credit bears interest at the greater of ~~2.95% above~~ the ~~London Interbank Offered~~U.S. Prime Rate or 3.00%, and the actual rate was ~~4.19%~~3.25% as of ~~September 30, 2017.~~March 31, 2021. As of ~~September 30, 2017,~~March 31, 2021, there ~~were no amounts outstanding.~~was 0 outstanding balance. The amount available under the line of credit is based on eligible accounts receivable and inventory up to the maximum principal ~~amount.~~amount and was $5,000 as of March 31, 2021. 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 September 30, 2017.~~

Exemplar has a $700 revolving line of credit with American State Bank ~~which~~that matures on October ~~30, 2018.~~31, 2021. As of ~~September 30, 2017,~~March 31, 2021, the ~~interest rate on this~~ line of credit ~~was 4.50%~~bore interest at 4.00% per annum, and there was an0 outstanding ~~balance of $234.~~balance.

~~Long Term~~Long-Term Debt

~~Long term~~Long-term debt consists of the following:


	March 31, 2021		December 31, 2020
Convertible debt	$	170,898	$	168,147
Notes payable	3,547		3,655
Other	72		80
Long-term debt	174,517		171,882
Less current portion	359		360
Long-term debt, less current portion	$	174,158	$	171,522

Precigen Convertible Notes

In July 2018, Precigen completed a registered underwritten public offering of $200,000 aggregate principal amount of Convertible Notes and issued the Convertible Notes under an indenture (the "Base Indenture") between Precigen and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by the First Supplemental Indenture (together with the Base Indenture, the "Indenture"). Precigen received net proceeds of $193,958 after deducting underwriting discounts and offering expenses of $6,042.

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 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). The conversion rate is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date as defined in the Indenture, Precigen will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. Prior to April 1, 2023, the holders may convert the Convertible Notes at their option only upon the satisfaction of the following circumstances:

•During any calendar quarter commencing after the calendar quarter ended on September 30, 2018, if the last reported sales price of Precigen's common stock for at least 20 trading days (whether or not consecutive) during the last 30 consecutive trading days of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•During the 5 business day period after any 5 consecutive trading day period in which the trading price, as defined in the Indenture, for the Convertible Notes is less than 98% of the product of the last reported sales price of Precigen's common stock and the conversion rate for the Convertible Notes on each such trading day; or

September 30,
2017 December 31,
2016
Notes payable $ 5,122
$ 5,453
Royalty-based financing 2,108
1,896
Other 882
599
Long term debt 8,112
7,948
Less current portion 439
386
Long term debt, less current portion $ 7,673
$ 7,562
•Upon the occurrence of specified corporate events as defined in the Indenture.

None of the above events allowing for conversion prior to April 1, 2023 occurred during the three months ended March 31, 2021. On or after April 1, 2023 until June 30, 2023, holders may convert their Convertible Notes at any time. Precigen may not redeem the Convertible Notes prior to the maturity date.

If Precigen undergoes a fundamental change, as defined in the Indenture, holders of the Convertible Notes may require Precigen to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. 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 (ii) immediately after such transaction, no default or event of default has occurred and is continuing under the Indenture.

The net proceeds received from the issuance of the Convertible Notes were initially allocated between long-term debt, the liability component, in the amount of $143,723, and additional paid-in capital, the equity component, in the amount of $50,235. Additional paid-in capital was further reduced by $13,367 of deferred taxes resulting from the difference between the carrying amount and the tax basis of the Convertible Notes that is created by the equity component, which also resulted in deferred tax benefit recognized from the reversal of valuation allowances on the then current year domestic operating losses in the same amount. As of March 31, 2021, the outstanding principal balance on the Convertible Notes was $200,000 and the carrying value of long-term debt was $170,898. The effective interest rate on the Convertible Notes, including amortization of the long-term debt discount and debt issuance costs, is 11.02%. As of March 31, 2021, the unamortized long-term debt discount and debt issuance costs totaled $29,102.

The components of interest expense related to the Convertible Notes were as follows:


	Three Months Ended March 31,
	2021		2020
Cash interest expense	$	1,750	$	1,750
Non-cash interest expense	2,751		2,517
Total interest expense	$	4,501	$	4,267

Accrued interest of $1,750 is included in other accrued liabilities on the accompanying condensed consolidated balance sheet as of March 31, 2021.

ActoBio Convertible Notes

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. 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 $235 for the three months ended March 31, 2020.

Precigen and PGEN Therapeutics Convertible Note

In December 2018, in conjunction with the Securities Purchase, Assignment and Assumption Agreement with Ares Trading S.A. ("Ares Trading"), Precigen and PGEN Therapeutics jointly and severally issued a $25,000 convertible note (the "Merck Note") to Ares Trading in exchange for cash. 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.

Trans Ova has a note payable to American State Bank ~~which~~that matures in April 2033 and ~~has~~had an outstanding principal balance of ~~$4,967~~$3,547 as of ~~September 30, 2017.~~March 31, 2021. Trans Ova pays monthly installments of $39, which includes interest at 3.95%. The note payable is collateralized by certain of Trans Ova's real estate and non-real estate assets.

AquaBounty has a royalty-based financing grant from the Atlantic Canada Opportunities Agency, a Canadian government agency, to provide funding of a research and development project. The total amount available under the award was $2,302, which AquaBounty claimed over a five year period. All amounts claimed by AquaBounty must be repaid in the form of a 10% royalty on any products commercialized out of this research and development project until fully paid. Because the timing of commercialization is subject to additional regulatory considerations, the timing of repayment is uncertain. As of the date of the acquisition by Intrexon in March 2013, AquaBounty had claimed $1,952 of the available funds and this amount was recorded at its acquisition date fair value of $1,107. The Company accretes the difference of $845 between the face value of amounts drawn and the acquisition date fair value over the expected period of repayment. Subsequent to the acquisition date, AquaBounty claimed the remaining balance available under the grant, resulting in total long term debt of $2,108 as of September 30, 2017.Future Maturities

Future maturities of ~~long term~~long-term debt as of March 31, 2021 are as follows:


2021	$	272
2022	398
2023	200,361
2024	375
2025	390
2026	406
Thereafter	1,417
Total	$	203,619

2017 $ 107
2018 462
2019 400
2020 371
2021 834
2022 360
Thereafter 3,470
Total $ 6,004

~~The AquaBounty royalty-based financing grant is not included in the table above due to the uncertainty of the timing of repayment.~~

~~13.~~12. Income Taxes

Tax provisions for interim periods are calculated using an estimate of actual taxable income or loss for the respective period, rather than estimating the Company's annual effective income tax rate, as the Company is currently unable to reliably estimate its income for the full year. ~~For~~The Company has U.S. taxable loss of approximately $40,400 and $79,300 for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2021 and 2020, respectively. The following table presents the ~~Company had U.S. taxable income~~components of

~~approximately $3,930 and $23,680, respectively, for which $78 and $473, respectively, in current~~ income tax (benefit) expense was recognized due to the alternative minimum tax. For the three and nine months ended September 30, 2017, the Company recognized $121 and $343, respectively, of current foreign income tax benefit. For the three and nine months ended September 30, 2016, the Company had U.S. taxable income (loss) of approximately $8,334 and $(9,346), respectively, for which no current income tax benefit was recognized. For the three and nine months ended September 30, 2016, the Company recognized $110 and $323, respectively, of current foreign income tax benefit. For the three and nine months ended September 30, 2017, the Company recorded deferred tax benefit of $775 and $2,294, respectively. For the three and nine months ended September 30, 2016, the Company recorded deferred tax benefit of $308 and $2,967, respectively. from continuing operations.


	Three Months Ended March 31,
	2021		2020


Current foreign income tax expense from continuing operations	$	4	$	40
Deferred income tax benefit from continuing operations	(56)		0
Total income tax (benefit) expense from continuing operations	$	(52)	$	40

The Company's net deferred tax assets, excluding certain deferred tax liabilities totaling ~~$15,868,~~$2,722, are offset by a valuation allowance due to the Company's history of net losses combined with an inability to confirm recovery of the tax benefits of the Company's losses and other net deferred tax assets. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

As of ~~September 30, 2017,~~March 31, 2021, the Company has net operating loss carryforwards for U.S. federal income tax purposes of approximately ~~$243,700~~$796,600 available to offset future taxable income, including approximately ~~$13,400 acquired in our acquisition~~$543,900 generated after 2017, U.S. capital loss carryforwards of ~~GenVec,~~approximately $211,500, and federal and state research and development tax credits of approximately ~~$7,800,~~$10,300, prior to consideration of annual limitations that may be imposed under Section 382 of the Internal Revenue Code of 1986, as amended. ~~These~~Net operating loss carryforwards generated prior to 2018 will begin to expire in ~~2022.~~2022, and capital loss carryforwards will expire if unutilized beginning in 2024. As of ~~September 30, 2017,~~March 31, 2021, the Company's ~~direct~~ foreign subsidiaries have foreign loss carryforwards of approximately ~~$146,800,~~$78,050, most of which do not expire.

13. Shareholders' Equity

~~Dividend to Shareholders~~Issuances of Precigen Common Stock

In January ~~2017,~~2021, the Company ~~distributed to its shareholders 1,776,557~~closed a public offering of 17,250,000 shares of ~~AquaBounty~~its common stock, ~~valued at $22,385. The distribution constituted~~resulting in net proceeds of $121,045 after deducting underwriting discounts and $568 of capitalized offering expenses.

Concurrent with entering into the TS Biotechnology Sale on January 1, 2020, the Company also entered into a ~~dividend to shareholders of record as of January 9, 2017. In connection~~subscription agreement with ~~the distribution and~~TS Biotechnology pursuant to ~~the terms of the Company's equity incentive plans, the conversion terms of all outstanding options for~~which TS Biotechnology purchased 5,972,696 shares of the Company's common stock asfor $35,000 on January 31, 2020.

See Notes 11 and 17 for discussion regarding additional issuances of ~~January 9, 2017 were adjusted~~Precigen common stock.

Share Lending Agreement

Concurrently with the offering of the Convertible Notes (Note 11), Precigen entered into a share lending agreement (the "Share Lending Agreement") with J.P. Morgan Securities LLC (the "Share Borrower") pursuant to ~~reflect~~which Precigen loaned and delivered 7,479,431 shares of its common stock (the "Borrowed Shares") to the Share Borrower. The Share Lending Agreement will terminate, and the Borrowed Shares will be returned to Precigen within five business days of such termination, upon (i) termination by the Share Borrower or (ii) the earliest to occur of (a) October 1, 2023 and (b) the date, if any, on which the Share Lending Agreement is either mutually terminated or terminated by one party upon a default by the other party. The Share Borrower maintains collateral in the form of cash or certain permitted non-cash collateral with a market value at least equal to the market value of the ~~distribution with respect~~Borrowed Shares as security for the obligation of the Share Borrower to return the Borrowed Shares when required by the terms above. The Borrowed Shares were offered and sold to the public at a price of $13.37 per share under a registered offering (the "Borrowed Shares Offering"). Precigen did not receive any proceeds from the sale of the Borrowed Shares to the public or any lending fees from the Share Lending Agreement. The Share Borrower or its affiliates received all the proceeds from the sale of the Borrowed Shares to the public. Affiliates of Third Security purchased all of the shares of ~~the Company's~~ common stock ~~by decreasing~~in the ~~exercise prices~~Borrowed Shares Offering.

The Share Lending Agreement was entered into at fair value and ~~increasing~~met the ~~number outstanding options. This adjustment resulted~~requirements for equity classification. Therefore, the value is netted against the issuance of the Borrowed Shares in ~~46,766~~ additional ~~outstanding options at a weighted average exercise price of $31.11.~~paid-in capital. Additionally, the Borrowed Shares are not included in the denominator for loss per share attributable to Precigen shareholders unless the Share Borrower defaults on the Share Lending Agreement.

Components of Accumulated Other Comprehensive ~~Loss~~Income

The components of accumulated other comprehensive ~~loss~~income are as follows:


	March 31, 2021		December 31, 2020
Unrealized gain (loss) on investments	$	(35)	$	13
Income on foreign currency translation adjustments	1,781		3,984
Total accumulated other comprehensive income	$	1,746	$	3,997

September 30,
2017 December 31,
2016
Unrealized loss on investments $ (15 ) $ (89 )
Loss on foreign currency translation adjustments (16,735 ) (36,113 )
Total accumulated other comprehensive loss $ (16,750 ) $ (36,202 )

~~15.~~14. Share-Based Payments

The Company ~~records~~measures the fair value of stock options and restricted stock units ("RSUs") issued to employees and ~~non-employees~~nonemployees as of the grant date asfor recognition of stock-based compensation expense. Stock-based compensation expense for employees and ~~non-employees~~nonemployees is recognized over the requisite service period, which is typically the vesting period. Stock-based compensation costs included in the condensed consolidated statements of operations are presented below:


	Three Months Ended March 31,
	2021		2020
Cost of products	$	9	$	4
Cost of services	65		29
Research and development	1,038		535
Selling, general and administrative	4,303		5,072
Discontinued operations	0		(1,268)
Total	$	5,415	$	4,372

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Cost of products $ 30
$ 21
$ 86
$ 61
Cost of services 82
68
242
206
Research and development 2,383
2,236
7,018
6,979
Selling, general and administrative 9,562
8,467
24,603
23,385
Total $ 12,057
$ 10,792
$ 31,949
$ 30,631

~~Intrexon~~Precigen Stock Option Plans

In April 2008, ~~Intrexon~~Precigen adopted the 2008 Equity Incentive Plan (the "2008 Plan") for employees and nonemployees pursuant to which ~~Intrexon's~~Precigen's board of directors granted ~~share based~~share-based awards, including stock options, to officers, key employees and nonemployees. Upon the effectiveness of the 2013 Omnibus Incentive Plan (the "2013 Plan"), no0 new awards may be granted under the 2008 Plan. As of ~~September 30, 2017,~~March 31, 2021, there were ~~492,414~~158,288 stock options outstanding under the 2008 Plan.

~~Intrexon~~Precigen adopted the 2013 Plan for employees and nonemployees pursuant to which ~~Intrexon's~~Precigen's board of directors may grant ~~share based~~share-based awards, including stock options and shares of common stock, to employees, officers, consultants, advisors, and nonemployee directors. The 2013 Plan became effective ~~upon the closing of the Company's initial public offering~~ in August 2013, and as of ~~September 30, 2017,~~March 31, 2021, there were ~~18,000,000~~27,000,000 shares authorized for issuance under the 2013 Plan, of which ~~12,149,356~~10,227,008 stock options and 574,672 RSUs were outstanding and ~~3,743,187~~6,753,674 shares were available for grant.

In April 2019, Precigen adopted the 2019 Incentive Plan for Non-Employee Service Providers (the "2019 Plan"), which became effective upon shareholder approval in June 2019. 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 March 31, 2021, there were 5,000,000 shares authorized for issuance under the 2019 Plan, of which 1,066,318 stock options and 215,692 RSUs were outstanding and 1,974,662 shares were available for grant.

Stock option activity was as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2020	11,255,896	$	15.53	7.25
Granted	228,320	7.74

Exercised	(26,790)	(5.70)
Forfeited	(1,726)	(9.98)
Expired	(4,086)	(26.77)
Balances at March 31, 2021	11,451,614	15.39		7.17
Exercisable at March 31, 2021	7,462,888	17.43		6.36

Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2016 11,640,383
$ 31.25
8.21
Granted 3,880,950
21.51

Adjustment due to dividend (Note 14) 46,766
31.11

Exercised (109,971 ) (7.63 )
Forfeited (2,610,431 ) (29.93 )
Expired (205,927 ) (33.17 )
Balances at September 30, 2017 12,641,770
28.59
7.86
Exercisable at September 30, 2017 5,313,100
29.85
6.77
RSU activity was as follows:

~~Intrexon~~


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2020	1,727,712	$	6.11	0.42
Granted	462,019	7.87
Vested	(1,399,367)	(5.47)

Balances at March 31, 2021	790,364	8.29		0.85

Precigen currently uses authorized and unissued shares to satisfy share award exercises.

~~In October 2015, the compensation committee and the independent members of Intrexon's board of directors approved a compensation arrangement whereby the~~The Company's ~~Chief~~ Executive ~~Officer~~Chairman ("~~CEO"~~Executive Chairman") ~~would receive a monthly salary. Previously, the CEO did not receive compensation for his services~~, who previously served as an employee ~~of the Company other than through his participation in the Company's Annual Executive Incentive Plan which became effective January 1, 2015. Pursuant to the compensation agreement, the CEO receives~~and executive officer until September 24, 2020, received a base salary of $200 per month through March 31, 2020, payable in ~~fully vested~~fully-vested shares of ~~Intrexon~~Precigen common stock with such shares subject to a three-year lock-up on resale. ~~The monthly number of shares of common stock is calculated based on~~In September 2020, the closing price on the last trading day of each month and the shares are issued pursuant to the terms of a Restricted Stock Unit Agreement ("RSU Agreement") which was executed between Intrexon and the CEO pursuant to the terms of the

~~2013 Plan. The RSU Agreement became effective in November 2015, and had an initial term of 12 months. In October 2016, the independent members of Intrexon's~~Company's board of directors, ~~with~~upon the recommendation of the compensation committee of the board, of directors, approved an extension of the RSU Agreement through December 31, 2016, and in December 2016 further approved an extension of the RSU Agreement to expire on March 31, 2017, both of which were on the same terms as the original RSU Agreement. In March 2017, the independent members of Intrexon's board of directors, with the recommendation of the compensation committee of the board of directors, approved a ~~renewal~~new compensation arrangement for the Executive Chairman consisting of (i) an annual retainer of $100 payable in cash or, at the ~~RSU Agreement through March 31, 2018 on the same terms as the original RSU Agreement. 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 vesting over one year. The new compensation arrangement began in calendar year 2021 and was prorated for the ~~shares issued as~~nine months of 2020 not covered by the Executive Chairman's previous compensation ~~for services~~arrangement discussed above. Expense associated with the arrangements above is included in selling, general, and administrative expenses in the Company's condensed consolidated statements of operations and totaled ~~$480~~$400 and ~~$463~~$454 for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, respectively, and $1,428 and $1,397 for the nine months ended September 30, 2017 and 2016,~~2020, respectively.

~~AquaBounty Stock Option Plans~~

In March 2016, AquaBounty's board of directors adopted the AquaBounty 2016 Equity Incentive Plan ("AquaBounty 2016 Plan") to replace the AquaBounty 2006 Equity Incentive Plan ("AquaBounty 2006 Plan"). The AquaBounty 2016 Plan provides for the issuance of incentive stock options, non-qualified stock options and awards of restricted and direct stock purchases to directors, officers, employees, and consultants of AquaBounty. The AquaBounty 2016 Plan was approved by AquaBounty's shareholders at its annual meeting in April 2016. Upon the effectiveness of the AquaBounty 2016 Plan, no new awards may be granted under the AquaBounty 2006 Plan.

As of September 30, 2017, there were 227,203 options outstanding under both AquaBounty plans, of which 183,373 were exercisable, at a weighted average exercise price of $9.39 per share. As of December 31, 2016, there were 185,591 options outstanding under these plans, of which 181,766 were exercisable, at a weighted average exercise price of $7.89 per share. The AquaBounty stock option data reflect a 1-for-30 reverse stock split of AquaBounty's common stock effective January 5, 2017.

~~16. Commitments and Contingencies~~

15. Operating Leases

The Company leases certain facilities and equipment under ~~noncancelable~~ 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. 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 ~~equipment~~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. At September 30, 2017, future minimum~~Company and do not contain residual value guarantees, covenants, or other restrictions.

The components of lease ~~payments under operating leases having initial or remaining noncancelable lease terms in excess of one year are~~costs were as follows:


	Three Months Ended March 31,
	2021		2020
Operating lease costs	$	839	$	901
Short-term lease costs	506		437
Variable lease costs	230		224
Lease costs	$	1,575	$	1,562

2017 $ 1,252
2018 8,083
2019 8,042
2020 8,063
2021 7,132
2022 6,085
Thereafter 25,695
Total $ 64,352

Rent expense, including other facility expenses, was $3,165 and $2,075 for the three months ended September 30, 2017 and 2016, respectively, and $7,772 and $6,410 for the nine months ended September 30, 2017 and 2016, respectively.

The Company maintains subleases for certain of its facilities. Rental income under sublease agreements was $32 and $184 for the three months ended September 30, 2017 and 2016, respectively, and $105 and $854 for the nine months ended September 30, 2017 and 2016, respectively. Future rental income is expected to be $20 for 2017, $80 for 2018, and $67 for 2019.

~~Purchase Commitments~~

As of ~~September 30, 2017, the Company had outstanding contractual purchase commitments~~March 31, 2021, maturities of ~~$10,618, which primarily relate~~lease liabilities, excluding short-term and variable leases, for continuing operations were as follows:


2021	$	2,653
2022	3,358
2023	2,055
2024	1,814
2025	1,076
2026	562
Thereafter	285
Total	11,803
Present value adjustment	(2,202)
Total	$	9,601
Current portion of operating lease liabilities	$	2,658
Long-term portion of operating lease liabilities	6,943
Total	$	9,601

Other information related to ~~amounts that will be paid~~operating leases in ~~2018~~continuing operations was as follows:


	March 31, 2021		December 31, 2020
Weighted average remaining lease term (years)	4.05		4.21
Weighted average discount rate	10.26	%	10.27	%


	Three Months Ended March 31,
	2021		2020
Supplemental disclosure of cash flow information
Cash paid for operating lease liabilities	$	1,005	$	995
Operating lease right-of-use assets added in exchange for new lease liabilities	55		25

16. Commitments and ~~2019 upon delivery of commercial non-browning apple trees.~~

Contingencies

~~In March 2012,~~On December 1, 2020, Trans Ova ~~was named as a defendant in a licensing and~~settled 1 of 2 patent infringement ~~suit~~lawsuits brought by XY, LLC ("XY") ~~alleging~~. 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 ~~certain of Trans Ova's activities breached a 2004 licensing agreement and infringed on patents that XY allegedly owned.~~settlement, Trans Ova ~~filed~~remitted to XY a ~~number of counterclaims~~settlement payment, which, in addition to all the ~~case. In Colorado District Court, the matter proceeded to a jury trial in January 2016. The jury determined that XY and~~other monies Trans Ova had ~~each breached~~previously paid XY, constituted full payment and satisfaction of the ~~licensing agreement~~judgment, including pre-judgment interest, post-judgment interest, costs, and ~~that~~all past, current and future royalty obligations under the judgment. In exchange, XY released and forever discharged Trans Ova ~~had infringed~~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 10 of the 12 counts of the operative complaint, dismissed those patent counts from the case, and stayed the remaining 2 counts of patent infringement pending XY's ~~patents. In April 2016,~~appeal of the Rule 54(b) judgment. While XY's appeal was pending, 1 of the 2 patents remaining in the case was separately invalidated in a different district court ~~issued its post-trial order, awarding $528~~proceeding, which XY did not appeal. As to the 10 dismissed counts in ~~damages to~~the suit XY brought against Trans Ova, ~~and $6,066 in damages to XY. The order also provided Trans Ova with a compulsory license to XY's technology, subject to an ongoing royalty obligation. Both parties~~XY appealed dismissal of only 4 of them, each alleging patent infringement. On July 31, 2020, the ~~court's order, which appeal is pending before the~~United States Court of Appeals for the Federal ~~Circuit. Since~~Circuit reversed the ~~inception~~district court's dismissal of those 4 patent counts and remanded the case for further proceedings. The Court is assessing next steps of the ~~2004 agreement,~~case, including an amended scheduling order.

Table of Contents

While this patent infringement lawsuit is pending, Trans Ova ~~has remitted payments~~shall continue to ~~XY pursuant to~~utilize the ~~terms of that agreement and has recorded these payments in cost of services in~~technology consistent with the ~~consolidated statements of operations for the respective periods. For the period from inception~~determinations of the ~~2004 agreement through the court's April 2016 order, aggregate royalty and license payments were $3,170,~~court proceedings. Nonetheless, these disputes remain subject to a number of which $2,759 had not yet been deposited by XY. For the nine months ended September 30, 2016, the Company recorded litigation expense of $4,228, which is included in selling, general and administrative expenses on the accompanying consolidated statement of operations and represents the excess of the net damages awarded to XY,uncertainties, 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 court's treasury, to be held until the appeals process is complete and final judgment amounts are determined. As of September 30, 2017, this amount is included in restricted cash on the accompanying consolidated balance sheet. In December 2016, Trans Ova elected to void the outstanding checks discussed above, and these amounts have been reclassified to other accrued liabilities on the accompanying consolidated balance sheets as of September 30, 2017 and December 31, 2016. Depending on the outcome of ~~an appeal decision,~~district court and appellate proceedings, the ~~damages awarded~~possibility of further claims by XY, and the impact of these matters on Trans Ova's ability to ~~either party could decrease, increase, or be eliminated. The appeal decision may also remand to~~utilize the Colorado District Court all, or a portion, of the issues being appealed. In December 2016, XY filed a complaint for patent infringement and trade secret misappropriation against Trans Ova in the District Court of Waco, Texas. Since the claims in this 2016 complaint directly relate to the 2012 licensing dispute and patent issues, Trans Ova filed and was granted a motion for change of venue to Colorado District Court. Trans Ova also filed a motion to dismiss, which is now pending before the Colorado court.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,~~litigation.

In October 2018, the Company received a subpoena from the Division of Enforcement of the Securities and Exchange Commission ("SEC") informing the Company of a non-public, fact-finding investigation concerning the Company's disclosures regarding its methane bioconversion platform. The Company produced documents to, ~~modify~~and met with, the ~~court-ordered license~~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 ~~XY's technologies,~~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 ~~recover monetary damages stemming from Trans Ova's counterclaims for antitrust violations by XY and its parent company, Inguran.~~the SEC.

In ~~May 2016, two putative~~October 2020, several purported shareholder class action lawsuits ~~captioned~~ ~~Hoffman v. Intrexon Corporation et al.~~ ~~and~~ ~~Gibrall v. Intrexon Corporation et al.~~, were filed in the U.S. District Court for the Northern District of California on behalf of certain purchasers of ~~Intrexon's~~the Company's common ~~stock between May 12, 2015 and April 20, 2016 (the "Class Period"). In July 2016, the court consolidated the lawsuits and appointed a lead plaintiff.~~stock. The ~~consolidated amended complaint names~~complaints name as defendants ~~Intrexon~~the Company and certain of ~~Intrexon's~~its current and former ~~officers (the "Defendants"). It alleges, among other things, that~~officers. The plaintiff's claims track the ~~Defendants made materially false and/or misleading statements during~~allegations in the ~~Class Period with respect to the Company's business, operations,~~SEC's administrative order described above and ~~prospects in violation of~~assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of ~~1934, as amended. The plaintiffs' claims are based in part upon allegations in a report published in April 2016 on the Seeking Alpha financial blog.~~1934. The plaintiffs seek compensatory damages, interest, and an award of reasonable ~~attorneys'~~attorney's fees and costs. ~~The Defendants moved to dismiss the case. On February 24, 2017,~~In April 2021, the court granted an order consolidating the ~~Company's motion to dismiss the lawsuit on the grounds that the~~claims and appointed a lead plaintiff failed to state a claim, while granting the plaintiff leave to amend. The plaintiff subsequently notified the court that it would seek to appeal the court's ruling rather than amend its complaint. On April 26, 2017, the court entered final judgmentand lead counsel in the ~~case. Notice of appeal was filed by the plaintiff on May 26, 2017. On October 26, 2017, the plaintiff filed~~case, captioned Abailla v. Precigen, Inc., F/K/A Intrexon Corp., et al. In December 2020, a ~~voluntary motion to dismiss the case, which the court of appeals granted on November 1, 2017.~~

~~In July 2016, a putative~~derivative shareholder ~~derivative~~ action, captioned ~~Basile~~Edward D. Wright, derivatively on behalf of Precigen, Inc. F/K/A Intrexon Corp. v. ~~Kirk~~Alvarez et ~~al.~~al, was filed in the Circuit Court offor Fairfax County in Virginia ~~against certain~~on behalf of ~~the Company's directors, the Company's CEO, and Third Security, and naming the Company as a nominal defendant.~~Precigen, Inc. The complaint ~~alleges causes of action for breaches of fiduciary duty~~names as defendants current directors and ~~unjust enrichment relating to~~certain current and former officers. The plaintiff's claims track the ~~entry by~~allegations in the ~~Company into the Services Agreement with Third Security.~~SEC's administrative order described above and assert claims under state law. The plaintiff seeks ~~among other things,~~ damages, ~~in an unspecified amount, disgorgement~~forfeiture of ~~improper~~ benefits ~~appropriate equitable relief,~~received by defendants, and an award of ~~attorney~~reasonable attorneys' fees and ~~other costs and expenses.~~costs. The complaint is substantially similar to two separate demands made by shareholders concerning the Services Agreement and Mr. Kirk's compensation. The board of directors of the Company appointed a Special Litigation Committee ("SLC") consisting of independent directors to investigate the claims and allegations made in the derivative action and in the two shareholder demands and to decide on behalf of the Company whether the claims and allegations should be pursued. The ~~Basile~~ case was stayed pending the report of the SLC. In November 2016, the SLC completed its review and evaluation and unanimously determined that the claims were without merit because the compensation arrangements were the result of an informed and disinterested decision-making process and were fair to the Company, and that prosecution of the asserted claims was not in the best interest of Intrexon or its shareholders. Based upon the determination of the SLC, on February 24, 2017, the Company moved to dismiss the court action pursuant to Virginia statute. On June 8, 2017,

the court granted the Company's motion to dismiss while granting the plaintiff leave to amend. On August 30, 2017, the plaintiff filed a consent motion for leave to amend along with the amended shareholder derivative complaint. The Company moved to dismiss the amended complaint on October 6, 2017. The Company intends to continue to defend the lawsuit vigorously. There can be no assurance, however, regarding the ultimate outcome of the case.

In addition to the shareholder demands above, in June and July 2016, two shareholders made separate demands under Virginia law demanding that the Company file suit against certain of its current officers and directors for alleged breaches of fiduciary duty and other claims. The demands were based upon and asserted the allegations previously published in April 2016 in the Seeking Alpha financial blog. In July 2016, the Company's board of directors authorized the SLC to expand its review to include all such allegations. In February 2017, the SLC completed its review and evaluation and unanimously determined that there was no basis for any of the allegations, that the Company's officers and directors did not breach their fiduciary duties or any other applicable law, and that prosecution of the asserted claims was not in the best interest of Intrexon or its shareholders. Following the SLC's determination, in March 2017, one of the putative shareholders filed a derivative complaint captioned ~~Luger v. Kirk et al.~~ in the Circuit Court of Fairfax County, Virginia. The Company is a nominal defendant in this action, and other defendants include certain of the Company's directors, the Company's CEO, and Third Security. The complaint alleges causes of action for breaches of fiduciary duty and unjust enrichment relating to the entry by the Company into the Services Agreement with Third Security, Mr. Kirk's compensation, and certain allegations contained in the April 2016 Seeking Alpha financial blog piece. Based on the determination of the SLC and a review of applicable law, the Company intends to defend the ~~lawsuit~~lawsuits vigorously; however, there can be no ~~assurance~~assurances regarding the ultimate outcome of ~~this case.~~these lawsuits.

~~The Division~~On July 10, 2020, the Company received a notice of ~~Enforcement~~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 ~~U.S. Securities~~ECC agreements with Thrive Agrobiotics, Inc., Exotech Bio, Inc., and ~~Exchange Commission ("SEC") is conducting an investigation~~AD Skincare, Inc., which the Company ~~believes concerns certain issues raised~~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 to the Company its membership interests in Intrexon Energy Partners II; and (iv) mutual irrevocable and unconditional releases of claims. The Company wrote off the investment balances and netted the deferred revenue balances associated with the eliminated service obligation against the consideration paid. Outstanding receivables from these Harvest start-up entities related to research and development services performed by the ~~foregoing matters.~~ 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 ~~met with the SEC staff~~previously entered into strategic collaborations, including ECCs and ~~is voluntarily cooperating with their investigation. The Company's board of directors has authorized the SLC~~JVs, to ~~monitor~~fund and develop products enabled by its technologies. These relationships involve complex interests, and the Company's ~~interaction~~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 ~~SEC staff.~~

Company transitions away from, or terminates, certain strategic collaborations. 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 March 31, 2021. These disagreements and disputes result in management distraction and may ~~become subject to other claims and assessments from time to time~~result in litigation, unfavorable settlements, or concessions by the ~~ordinary~~Company, or adverse regulatory action, any of which could harm the Company's business or operations.

In the course of ~~business.~~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. The Company accrues liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As

Table of ~~September 30, 2017 and December~~Contents

of March 31, ~~2016,~~2021, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows.

17. Related Party Transactions

Third Security and Affiliates

The Company's ~~CEO and~~Executive Chairman ~~of the board of directors of the Company~~ is also the Senior Managing Director and ~~CEO~~Chairman of Third Security and owns 100% of the equity interests of Third Security.

In November 2015, the independent members of Intrexon'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") The Company has an agreement with Third Security ~~pursuant to~~under which the Company reimburses Third Security ~~provides the Company with~~for certain ~~professional, legal, financial, administrative, and other support~~tax-related services necessary to support the Company and its CEO. As consideration for providing these services, Third Security is entitled to a fee of $800 per month to be paid in the form of fully-vested shares of the Company's common stock. The number of shares of common stock is calculated based on the closing price of the Company's common stock on the 15th day of each month. The payments madeperformed 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 (Note 15). The Services Agreement had a term of one year, can be terminated by the Company at any time, and may be extended only by agreement of the parties, including approval of a majority of the independent members of Intrexon's board of directors. In October 2016, the independent members of Intrexon's board of directors, with the recommendation of the audit committee of the board of directors, approved an extension of the Services Agreement through December 31, 2016. In December 2016, the independent members of Intrexon's board of directors, with the recommendation of the audit committee of the board of directors, approved an extension of the Services Agreement through December 31, 2017. For the three months ended September 30, 2017 and 2016, the Company issued 118,828 shares and 89,326 shares, respectively, with values of $2,251 and $2,132, respectively, to Third Security as ~~payment for services pursuant to~~requested by the ~~Services Agreement. For the nine months ended September 30, 2017 and 2016, the~~Company. The Company issued 329,649 shares and 254,496 shares, respectively, with values of $6,506 and $6,542, respectively, to Third Security as payment for services pursuant to the Services Agreement. In addition to the foregoing Services Agreement, the Companyalso reimburses Third Security for certain out-of-pocket expenses incurred on the Company's ~~behalf, and the~~behalf. The total expenses incurred by the Company

under ~~this arrangement~~these arrangements were $4$41 and ~~$156~~$38 for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, respectively, and $428 and $301 for the nine months ended September 30, 2017 and 2016,~~2020, respectively.

See also Note 1514 regarding compensation arrangements between the Company and its ~~CEO.~~Executive Chairman.

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 $20 and $22 for the three months ended March 31, 2021 and 2020, respectively.

See Notes 1, 3, and 13 regarding additional transactions with affiliates of Third Security.

Transactions with ECC Parties

~~In addition to entities controlled by Third Security, any entity~~Collaborators in which the Company holds more than a de minimis equity ~~securities,~~interest, including ~~securities~~interests received as upfront or milestone ~~consideration, and which also are party to a collaboration with the Company~~payments through collaborations, are considered ~~to be~~ related parties.

The Company ~~holds promissory notes~~held Series A Convertible Preferred Stock (the "Convertible Preferred Shares"), a convertible ~~into~~note, common shares of ~~Fibrocell common stock ("convertible note")~~Castle Creek, and warrants to purchase shares of ~~Fibrocell~~Castle Creek common ~~stock.~~stock previously acquired through collaborations and other transactions. As a result of ~~September 30, 2017~~the acquisition of Castle Creek by Castle Creek Pharmaceutical Holdings, Inc. ("Castle Creek Pharmaceutical") in December 2019, the Company received $1,280 in December 2019 for its shares of Castle Creek common stock and ~~December 31, 2016,~~received a total of $3,311 in January 2020 for the ~~value of~~Convertible Preferred Shares and the convertible note, ~~and warrants totaled $4,172 and $1,642, respectively, and~~including accrued interest thereon. Subsequent to the acquisition by Castle Creek Pharmaceutical, Castle Creek is ~~included in other assets on the accompanying consolidated balance sheets. See Note 7 for additional discussion of the Company's investments in Fibrocell.~~

In May 2017, the Company purchased a promissory note from Oragenics ("Oragenics' Promissory Note") with a principal value of $2,400 which matures in May 2019 and accrues interest at a rate of 12% per annum. This note is included in other assets on the accompanying consolidated balance sheet as of September 30, 2017. See Note 19 for additional discussion regarding the Oragenics Promissory Note.

~~Other Related Parties~~

~~In June 2015, the Company entered into an agreement with Harvest, an investment fund sponsored by Harvest Capital Strategies, LLC, and~~no longer 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 statements of operations and totaled $613 for the three months ended September 30, 2017 and 2016, and $1,839 and $1,871 for the nine months ended September 30, 2017 and 2016, respectively. In September 2017, the commitment period for Harvest was terminated and, as a result, our agreement with Harvest terminated. The termination of the agreement had no effect on the already-established collaborations with Harvest-sponsored entities.party.

18. Net Loss per Share

The following table presents the computation of basic and diluted net ~~loss~~income (loss) per share:


	Three Months Ended March 31,
	2021		2020
Historical net loss per share:
Numerator:
Net loss from continuing operations	$	(21,844)	$	(20,846)
Net income (loss) from discontinued operations	4,526		(35,152)
Net loss	$	(17,318)	$	(55,998)
Denominator:
Weighted average shares outstanding, basic and diluted	193,499,546		160,338,743
Net loss per share:
Net loss from continuing operations per share, basic and diluted	$	(0.11)	$	(0.13)
Net income (loss) from discontinued operations per share, basic and diluted	0.02		(0.22)
Net loss per share, basic and diluted	$	(0.09)	$	(0.35)

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
Historical net loss per share:
Numerator:
Net loss attributable to Intrexon $ (39,689 ) $ (28,982 ) $ (89,752 ) $ (142,475 )
Denominator:
Weighted average shares outstanding, basic and diluted 120,518,885
118,346,782
119,741,291
117,785,160
Net loss attributable to Intrexon per share, basic and diluted $ (0.33 ) $ (0.24 ) $ (0.75 ) $ (1.21 )

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The following potentially dilutive securities as of ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, have been excluded from the above computations of diluted weighted average shares outstanding for the three ~~and nine~~ months then ended as they would have been anti-dilutive:


	March 31,
	2021	2020
Convertible debt	11,732,440	31,614,643
Options	11,451,614	13,066,947
Restricted stock units	790,364	3,389,146
Warrants	133,264	133,264
Total	24,107,682	48,204,000

September 30,
2017 2016
Options 12,641,770
12,103,407
Warrants 133,264
30,191
Total 12,775,034
12,133,598

19. ~~Subsequent Events~~Segments

~~In November 2017, concurrent~~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 income (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) gain or loss on disposals of assets, (viii) loss on impairment of goodwill and other noncurrent assets, (ix) equity in net loss of affiliates, and (x) recognition of previously deferred revenue associated with ~~the closing of Oragenics' preferred stock financing, the Company exchanged its Oragenics' Promissory Note~~upfront and ~~receivables due from Oragenics,~~milestone payments as well as ~~accrued interest, totaling $3,376 for Oragenics Series C preferred stock ("Series C Preferred Stock"). The Series C Preferred Stock is non-voting~~cash outflows from capital expenditures and ~~non-convertible and is redeemable~~investments in ~~whole or part at any time by Oragenics in cash. The Series C Preferred Stock accrues an annual 12% dividend payable in additional Series C Preferred Stock through May 10, 2019, and after such date,~~affiliates, but includes proceeds from the ~~annual dividend increases to 20%. Additionally, the Company and Oragenics amended certain future payment terms under its ECCs.~~

In October 2017, the Company entered into a Preferred Stock Equity Facility ("Preferred Stock Facility") with an affiliate of Third Security ("Third Security Affiliate"). Under the Preferred Stock Facility, the Company may, from time to time at its sole and exclusive option, issue and sell to the Third Security Affiliate, up to $100,000 of newly issued Series A Redeemable Preferred Stock ("Series A Preferred Stock"). Any issued Series A Preferred Stock is non-voting, accrues dividends of 8% per annum and, subject to limited exceptions, is senior to Intrexon's common stock with respect to the rights to the payment of dividends and on parity with the common stock with respect to the distributionsale of assets in the event of any liquidation, dissolution or winding up or change of control of Intrexon. Any issued Series A Preferred Stock is convertible into common stock only following receipt of shareholder approval byperiod sold. During the three months ended March 31, 2021, the Company ~~including a majority~~modified the definition of Segment Adjusted EBITDA to exclude the ~~shares voted by those shareholders unaffiliated with Mr. Kirk (the "Shareholder Approval"), subject~~gain or loss on disposals of assets and include proceeds from the sale of assets in the period sold. Segment Adjusted EBITDA for the three months ended March 31, 2020 was restated to ~~any necessary regulatory approvals. Following receipt~~reflect this change.

Because the Company uses Segment Adjusted EBITDA as its primary measure of ~~the Shareholder Approval and receipt~~segment performance, it has included this measure in its discussion of any necessary regulatory approvals, any issued Series A Preferred Stock is convertible into Intrexon common stock based on a conversion price using the 20-day volume-weighted average market price as of market closing on the fifth business day prior to the mailing of the proxy statement soliciting the Shareholder Approval, subject to adjustment for certain stock splits and similar events.segment operating results. The Company has ~~agreed~~also disclosed revenues from external customers and intersegment revenues for each reportable segment. Corporate expenses are not allocated to ~~take all reasonable steps necessary~~the segments and are managed at a consolidated level. The CODM does not use total assets by segment to ~~seek Shareholder Approval on~~evaluate segment performance or allocate resources, and accordingly, these amounts are not required to be disclosed. 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 three months ended March 31, 2021, the Company's 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 three months ended March 31, 2021. See Note 2 for a description of Biopharmaceuticals. See Note 1 for a description of Exemplar and Trans Ova.

Segment Adjusted EBITDA by reportable segment was as follows:


	Three Months Ended March 31,
	2021		2020
Biopharmaceuticals	$	(8,854)	$	(10,022)
Exemplar	1,806		250
Trans Ova	6,421		(457)
Segment Adjusted EBITDA for reportable segments	$	(627)	$	(10,229)

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The table below reconciles Segment Adjusted EBITDA for reportable segments to consolidated net loss from continuing operations before ~~the date~~income taxes:


	Three Months Ended March 31,
	2021		2020
Segment Adjusted EBITDA for reportable segments	$	(627)	$	(10,229)

Remove cash paid for capital expenditures, net of proceeds from sale of assets, and cash paid for investments in affiliates	597		2,125
Add recognition of previously deferred revenue associated with upfront and milestone payments	307		12,473
Other expenses:
Interest expense	(4,539)		(4,592)
Depreciation and amortization	(3,523)		(3,799)
Loss on disposals of assets	(121)		(217)


Stock-based compensation expense	(5,415)		(5,640)
Adjustment related to accrued bonuses paid in equity awards	0		2,833
Equity in net loss of affiliates	(3)		(351)
Other	(7)		9
Unallocated corporate costs	(8,194)		(10,838)
Eliminations	(371)		(2,580)
Consolidated net loss from continuing operations before income taxes	$	(21,896)	$	(20,806)

Revenues by reportable segment were as follows:


	Three Months Ended March 31, 2021
	Biopharmaceuticals		Exemplar		Trans Ova		Total
Revenues from external customers	$	178	$	3,257	$	21,076	$	24,511
Intersegment revenues	241		0		107		348
Total segment revenues	$	419	$	3,257	$	21,183	$	24,859


	Three Months Ended March 31, 2020
	Biopharmaceuticals		Exemplar		Trans Ova		Total
Revenues from external customers	$	10,862	$	2,151	$	16,785	$	29,798
Intersegment revenues	2,089		0		109		2,198
Total segment revenues	$	12,951	$	2,151	$	16,894	$	31,996

The table below reconciles total segment revenues from reportable segments to total consolidated revenues:


	Three Months Ended March 31,
	2021		2020
Total segment revenues from reportable segments	$	24,859	$	31,996
Other revenues	0		41
Elimination of intersegment revenues	(348)		(2,199)
Total consolidated revenues	$	24,511	$	29,838

As of ~~its annual meeting of shareholders in 2019. Any issued Series A Preferred Stock is redeemable at the election of~~March 31, 2021 and December 31, 2020, the Company ~~at any time, or at~~had $5,407 and $5,908, respectively, of long-lived assets in foreign countries. The Company recognized revenues derived in foreign countries totaling $99 and $241 for the ~~election~~three months ended March 31, 2021 and 2020, respectively.

Table of the Third Security Affiliate after December 31, 2020. The Preferred Stock Facility will expire on the earliest to occur of: (i) the date on which the Third Security Affiliate has purchased shares of Series A Preferred Stock in the aggregate amount of $100,000, (ii) April 30, 2019, (iii) the date of the Shareholder Approval, and (iv) the mutual agreement of the parties.Contents

Also, in November 2017, the Company filed with the State Corporation Commission of the Commonwealth of Virginia (the "SCC") Articles of Amendment to the Company's Amended and Restated Articles of Incorporation (the "Amendment"), which amended Article III thereof to set the designations of the Series A Preferred Stock (described above) to be issued pursuant to the Preferred Stock Facility. The Amendment became effective upon the issuance by the SCC in November 2017 of a certificate of amendment.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q, or Quarterly Report, and our Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2020, or Annual Report.

The following discussion contains forward-looking statements that reflect our plans, estimates, expectations, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements and you are cautioned not to place undue reliance on forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, ~~on Form 10-Q,~~ particularly in "Special Note Regarding Forward-Looking Statements" and "Risk Factors." The forward-looking statements included in this Quarterly Report ~~on Form 10-Q~~ are made only as of the date hereof.

Overview

We ~~believe we~~ are a ~~leader~~dedicated discovery and clinical-stage biopharmaceutical company advancing the next generation of gene and cell therapies with the overall goal of improving outcomes for patients with significant unmet medical needs. We are leveraging our proprietary technology platforms to develop product candidates designed to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. We have developed an extensive pipeline of therapies across multiple indications within these core focus areas.

We believe that our array of technology platforms uniquely positions us among other biotechnology companies to advance precision medicine. Precision medicine is the ~~field~~practice of ~~synthetic biology, an emerging and rapidly evolving discipline~~therapeutic product development that ~~applies engineering principles~~takes into account specific genetic variations within populations impacted by a disease to ~~biological systems~~design targeted therapies to ~~enable rational, design-based control of cellular function~~improve outcomes for a ~~specific purpose. Using our suite of~~disease or patient population. Our proprietary and complementary ~~technologies, we design, build and regulate~~technology platforms provide a strong foundation to realize the core promise of precision medicine by supporting our efforts to construct powerful gene programs ~~which~~to drive efficacy, deliver these programs through viral, non-viral, and microbe-based approaches to drive lower costs, and control gene expression to drive safety. Our therapeutic platforms, including UltraCAR-T, AdenoVerse immunotherapy, and ActoBiotics, are DNA sequences that consist of key genetic components. A single gene program or a complex, multi-genic program are fabricated and stored within a DNA vector. Vectors are segments of DNA used as a vehicledesigned to transmit genetic information. DNA vectors can, in turn, be introduced into cells in order to generate a simple or complex cellular system, which are the basic and complex cellular activities that take place within a cell and the interaction of those systems in the greater cellular environment. It is these genetically modified cell systems that can be used to produce biological effector molecules, or be employed directly to enable the development of new and improved products and manufacturing processes across a variety of end markets, including health, food, energy, environment, and consumer. Our synthetic biology capabilities include the abilityallow us to precisely control the ~~amount,~~level and physiological location of gene expression and ~~modification of~~modify biological molecules to control the function and output of living cells to treat underlying disease conditions.

We are actively advancing our lead clinical programs, including: PRGN-3005 and ~~optimize~~PRGN-3006, which are built on our UltraCAR-T platform; PRGN-2009 and PRGN-2012, which are based on our AdenoVerse immunotherapy platform; and AG019, which is built on our ActoBiotics platform. In addition, we recently completed a Phase 1 study of INXN-4001, a non-viral triple-effector plasmid DNA, which is built on our UltraVector platform. We also have a robust pipeline of preclinical programs that we are pursuing in order to drive long-term value creation.

We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies. In October 2020, we announced that UltraPorator received U.S. Food and Drug Administration, or FDA, clearance for ~~desired results~~manufacturing UltraCAR-T cells in clinical trials, and in November 2020, we announced that we have begun dosing patients with UltraCAR-T cells manufactured with UltraPorator in our PRGN-3005 and PRGN-3006 clinical trials.

We exercise discipline in our portfolio management by systematically evaluating data from our preclinical programs in order to make rapid "go" and "no go" decisions. Through this process, we believe we can more effectively allocate resources to programs that we believe show the most promise and advance such programs to clinical trials.

Our Healthcare Business

Our healthcare business focuses on human therapeutics and developing research models and services for healthcare research applications. Our Biopharmaceuticals segment is operated by our wholly owned subsidiaries PGEN Therapeutics, Inc., or PGEN Therapeutics, and Precigen ActoBio, Inc., or ActoBio, and our majority ownership interest in Triple-Gene LLC, doing business as Precigen Triple-Gene, or Triple-Gene, as well as equity and royalty interests in therapeutics and therapeutic platforms from companies not controlled by us. Exemplar Genetics LLC, doing business as Precigen Exemplar, or Exemplar, is a wholly owned subsidiary which is focused on developing research models and services for healthcare research applications.

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Biopharmaceuticals

PGEN Therapeutics

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 operates as an innovation engine, progressing a preclinical and clinical pipeline of well-differentiated therapies toward clinical proof-of-concept and commercialization.

PGEN Therapeutics is developing therapies primarily built on our UltraCAR-T therapeutics platform and our "off-the-shelf" AdenoVerse immunotherapy platform. 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 ~~an industrial scale.~~

a medical center's current good manufacturing practices facility 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. We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies. The UltraPorator system includes proprietary hardware and software solutions and potentially represents major advancements over current electroporation devices by significantly reducing the processing time and contamination risk. UltraPorator is intended to be a viable scale-up and commercialization solution for decentralized UltraCAR-T manufacturing. Our AdenoVerse immunotherapy platform utilizes a library of proprietary adenovectors for the efficient gene delivery of therapeutic effectors, immunomodulators, and vaccine antigens. We have established proprietary manufacturing cell lines and production methodologies from our AdenoVerse immunotherapy platform, which we believe are easily scalable for commercial supply. We believe that ~~because synthetic biology~~our proprietary gorilla adenovectors, part of the AdenoVerse technology, have superior performance characteristics as compared to current competition, including standard human adenovirus serotype 5, rare human adenovirus types and other non-human primate adenovirus types.

Our most advanced programs within PGEN Therapeutics are as follows:

PRGN-3005 is a first-in-class, investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to simultaneously express a CAR targeting the unshed portion of the Mucin 16 antigen, mbIL15, and kill switch genes. PRGN-3005 is currently being evaluated in a Phase 1/1b clinical trial for the treatment of advanced, recurrent platinum-resistant ovarian cancer, fallopian tube or primary peritoneal cancer. A dose escalation phase of the intraperitoneal (IP) arm of the PRGN-3005 Phase 1 trial is ongoing, and an expansion phase is planned at the maximum tolerated dose, or MTD. A dose escalation phase of the intravenous (IV) arm of the PRGN-3005 trial is ongoing concurrently with the IP arm.

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

PRGN-2009 is a first-in-class, "off-the-shelf" investigational immunotherapy designed to activate the immune system to recognize and target human papillomavirus-positive, or HPV+, solid tumors. PRGN-2009 leverages our UltraVector and AdenoVerse platforms to optimize HPV type 16 and HPV type 18, antigen design for delivery via a proprietary gorilla adenovector with a large genetic payload capacity and the ability for repeat administrations. PRGN-2009 is in a Phase 1/2 clinical trial as a monotherapy or in combination with bintrafusp alfa, or M7824, an investigational bifunctional fusion protein, for patients with HPV-associated cancers in collaboration with the National Cancer Institute, or NCI, pursuant to a cooperative research and development arrangement, or CRADA.

PRGN-2012 is a first-in-class, investigational "off-the-shelf" AdenoVerse immunotherapy for the treatment of recurrent respiratory papillomatosis, or RRP. PRGN-2012 is an innovative therapeutic vaccine with optimized antigen design that uses our gorilla adenovector technology to elicit immune responses directed against cells infected with HPV type 6 and HPV type 11. PRGN-2012 is in a Phase 1 clinical trial for adult patients with RRP. In March 2021, we announced that the first patient was dosed in the PRGN-2012 Phase 1 trial. PRGN-2012 is being developed in collaboration with the Center for Cancer Research at the NCI pursuant to a CRADA. PRGN-2012 was granted Orphan Drug designation for treatment of RRP by the FDA.

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In addition to our clinical programs, PGEN Therapeutics has ~~applicability~~a robust pipeline of preclinical programs that we are pursuing in order to drive long-term value creation. Our pipeline includes a number of product candidates, including UltraCAR-T therapeutics for various cancers, and "off-the-shelf" AdenoVerse immunotherapy for infectious disease, and a multifunctional therapeutic for solid tumors. We expect to continue development of various preclinical programs to identify product candidates for evaluation in clinical trials.

Precigen ActoBio, Inc.

ActoBio is pioneering a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics. We refer to these microbe-based biopharmaceuticals as ActoBiotics. Our ActoBiotics platform is a unique delivery platform precisely tailored for specific disease modification with the potential for superior efficacy and safety. ActoBiotics combine the advantages of highly selective protein-based therapeutic agents with local delivery by the well-characterized and food-grade bacterium Lactococcus lactis, or L. lactis. ActoBiotics can be delivered orally in a capsule, through an oral rinse, or in a topical solution. We believe ActoBiotics have the potential to provide superior safety and efficacy via the sustained release of appropriate quantities of select therapeutic agents as compared to injectable biologics, while reducing the side effects commonly attributed to systemic delivery and corresponding peaks in concentration.

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 currently in a Phase 1b/2a clinical trial for the treatment of early-onset T1D. The Phase 1b portion of the study evaluates the safety and tolerability of AG019 monotherapy administered as a single dose and repeated daily doses in adult and adolescent patients. The Phase 2a portion of the study investigates the safety and tolerability of AG019 in combination with teplizumab, or PRV-031. Enrollment and dosing in the Phase 1b and Phase 2a portions of the study are complete. The primary endpoint of assessing safety and tolerability in the Phase 1b monotherapy portion of the study was met, and preliminary results at six months after AG019 monotherapy treatment initiation showed an encouraging trend in C-peptide levels, a biomarker for T1D disease progression. 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. No dose-related adverse events or serious adverse events were reported in either portion of this trial.

Precigen Triple-Gene

Triple-Gene is a clinical stage gene therapy company focused on developing advanced treatments for complex cardiovascular diseases. Triple-Gene's approach is to develop a holistic treatment for heart failure through improvements in angiogenesis, calcium homeostasis-associated cellular energetics, reductions in inflammatory signals, and the activation/recruitment of stem cells to support heart remodeling. Triple-Gene's most advanced candidate, INXN-4001, a non-viral triple-effector plasmid based on our UltraVector platform designed for constitutive expression of human S100A1, SDF-1a, and VEGF-165, is engineered to address multiple pathways of heart failure. Utilizing a single plasmid comprising all three genes, instead of each individual gene on separately delivered plasmids, INXN-4001 can control for delivery and ensure expression of the three genes in all transfected cells. A first-in-human, open label Phase 1 trial designed to evaluate the safety of retrograde coronary sinus infusion, or RCSI, of INXN-4001 in outpatient left ventricular assist device, or LVAD, recipients has been completed. Six-month follow-up data demonstrated that the study met the primary endpoints to evaluate safety and feasibility for INXN-4001, and analysis of the final results is ongoing.

Partnered Program

We have partnered with Castle Creek Biosciences, Inc. (formerly Fibrocell Science, Inc.), or Castle Creek, to advance product candidates D-Fi (debcoemagene autoficel), formerly designated FCX-007, for the treatment of recessive dystrophic epidermolysis bullosa, or RDEB, and FCX-013 for the treatment of localized scleroderma. In October 2020, Castle Creek announced the dosing of the first patient in the ongoing Phase 3 trial of D-Fi and the dosing of the first patient in the ongoing Phase 1/2 trial of FCX-013. The FDA has granted Orphan Drug designation to D-Fi for the treatment of Dystrophic Epidermolysis Bullosa, which includes RDEB. In addition, D-Fi has been granted Rare Pediatric Disease designation, Fast Track designation, and Regenerative Medicine Advanced Therapy designation by the FDA for treatment of RDEB. 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 March 2020, we and Castle Creek terminated

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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. Castle Creek retains a license to continue to develop and commercialize the Retained Products within the field of use for so long as Castle Creek continues to pursue such development and commercialization, and we are also entitled to certain royalties with respect to the Retained Products. We are also required to perform certain drug product manufacturing activities related to the Retained Products.

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. Historically, researchers have lacked animal models that faithfully represent human diseases. As a result, a sizeable barrier has blocked progress in the discovery of human disease mechanisms; novel diagnostics, procedures, devices, prevention strategies and therapeutics; and the ability to predict in humans the efficacy of those next-generation procedures, devices, and therapeutics. Exemplar's MiniSwine models are genetically engineered to exhibit a wide variety of human disease states, which provides a more accurate platform to test the efficacy of new medications and devices.

Our Non-Healthcare Business

At March 31, 2021, our only non-healthcare business is our established bovine genetics company, Trans Ova Genetics, L.C., or Trans Ova.

Trans Ova

Trans Ova is internationally recognized as a provider of industry-leading bovine reproductive technologies. Trans Ova offers bovine embryo transfer technologies, in addition to other advanced reproductive technologies, including in vitro fertilization, or IVF, sexed-semen, genetic preservation, and cloning. 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.

COVID-19 Impact

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

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.

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. For example, starting in March 2020, we 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, our 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 recruitment in the study resumed. Additionally, from April to May 2020, enrollment of new patients in our 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. Recruitment resumed in the PRGN-3005 trial in May 2020. Although these suspensions did not result in significant overall delay, there is uncertainty regarding the duration and severity of the ongoing pandemic, and we could experience further delays of other pandemic-related events that may adversely impact our clinical as well as preclinical pipeline candidates in the future. Notwithstanding the foregoing, as the COVID-19 pandemic continues to evolve, we may experience additional delays to our clinical trials, including related to enrollment, site closures, reduced availability of key personnel, or our ability to receive the necessary approvals from the FDA or other regulatory agencies to advance our programs.

We are also closely monitoring the impact of COVID-19 on other aspects of our business. While Trans Ova and Exemplar have not experienced any significant impacts as a result of COVID-19 at this time, we are unable to reliably quantify or estimate what the future impacts may be.

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Given the dynamic nature of these circumstances, the full impact of the COVID-19 pandemic on our ongoing business, results of operations, and overall financial performance cannot be reasonably estimated at this time. For more information regarding the risks associated with COVID-19 and its impact on our business, see "Risk Factors" in Part II - Item 1A.

Discontinued Operations

Historically, we developed technology platforms for application across ~~many~~a variety of diverse end markets, including health, food, energy, and environment. In January 2020, we ~~cannot take full advantage of synthetic biology with internal development programs alone. To address this,~~announced that we ~~have devised~~were increasing our ~~business model to allow us to~~ focus on our ~~core expertise~~healthcare opportunities, which reflected our most advanced platforms, and in ~~synthetic biology while bringing many different commercial products to market via collaborations in~~connection therewith, we divested a ~~broad range of industries or end markets, thus minimizing and leveraging the use~~number of our ~~own capital.~~non-healthcare assets (referred to collectively as the Transactions) and changed our name to Precigen, Inc.

~~Our business model was built primarily around~~In 2020, as a result of market uncertainty driven by the formation of exclusive channel collaborations, or ECCs. An ECC is an agreement with a collaborator to develop products based on technologies in a specifically defined field. Historically, we have sought collaborators with expertise within a specific industry sectorCOVID-19 pandemic and the ~~commitment to provide resources~~state of the energy sector raising significant challenges for the ~~commercialization~~strategic alternatives pursued by MBP Titan, LLC, or MBP Titan, our methane bioconversion business, we 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. This discontinuation of operations represented the continuation of a strategic shift that we commenced in early 2020 to becoming a primarily healthcare company advancing technologies and products ~~within~~ that ~~industry sector. In~~address complex healthcare challenges. After the wind down of MBP Titan, certain assets and contractual obligations which were originally related to MBP Titan continue to be managed at the Precigen corporate level. These remaining assets and contractual obligations include our ~~ECCs, we provide expertise~~equity interests in and collaboration agreements with Intrexon Energy Partners, LLC, or Intrexon Energy Partners, and Intrexon Energy Partners II, LLC, or Intrexon Energy Partners II, including the ~~engineering of gene programs and cellular systems, and our collaborators are responsible for providing market and product development expertise,~~associated deferred revenue remaining under each collaboration agreement, as well as ~~sales and marketing capabilities.~~the associated intellectual property.

This business model allows us to leverage our capabilities and capital across numerous product development programs and a broader landscape of end markets than we would be capable of addressing on our own. Our ECC business modelSee also allows us to participate in the potential upside from products that are enabled by our technologies across an extensive range of industries, without the need for us to invest considerable resources in bringing individual products to market. Additionally, the flexibility of the business model allows us to collaborate with a range of counterparts, from small innovative companies to global multinational conglomerates.

Alternatively, we have sometimes executed a research collaboration to develop an early-stage program pursuant to which we received reimbursement for our development costs but the exclusive commercial rights, and related access fees, were deferred until completion of an initial research program.

Over time, our business model has evolved. First, in certain strategic circumstances, we may enter into a joint venture, or JV, with a third party collaborator whereby we may contribute access to our technology, cash or both into the JV which we will jointly control with our collaborator. Pursuant to a JV agreement, we may be required to contribute additional capital"Notes to the ~~JV, and we may be able to receive a higher financial return than we would normally receive from an ECC to the extent that we and our collaborator are successful~~Condensed Consolidated Financial Statements (Unaudited) - Note 3" appearing elsewhere in ~~developing one or more products. For a~~this Quarterly Report for additional discussion of our ~~JVs, see the~~discontinued operations.

See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 4" appearing elsewhere in this Quarterly Report ~~on Form 10-Q. Second, while we seek to maintain~~for a ~~competitive edge in gene program creation~~discussion of Intrexon Energy Partners and ~~host cell and genome expertise, we have begun to finance internally early stage proof of concept programs and have sought to partner, on an industry segment basis, more mature~~Intrexon Energy Partners II.

~~programs and capabilities. By doing this, we endeavor to maximize leverage of our capital resources and ultimately hope to realize significant value from mature assets.~~Segments

As ~~we consider~~of March 31, 2021, our reportable segments were (i) Biopharmaceuticals, (ii) Exemplar, and (iii) Trans Ova. These identified reportable segments met the ~~broad potential applications~~quantitative thresholds to be reported separately for the three months ended March 31, 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. Corporate expenses exclude interest expense, depreciation and amortization, gain or loss on disposals of ~~our synthetic biology technologies,~~assets, stock-based compensation expense, loss on settlement agreement, and consistent with the evolution of our business model, we have identified a number of ventures that are already enabling products that benefit from the application of such technology. We believe that the strategic acquisition of certain such companies will allow us to develop and commercialize innovative products and create significant value for us. Our business model therefore includes the acquisition of certain product-focused companies that may leverage our technologies and expertise in order to expand their respective product applications.

As a means to further the development of our business model, in June 2015, we entered into an agreement with Harvest Intrexon Enterprise Fund I, LP, or 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, LLC, or Third Security. Harvest was established to invest in life science research and development start-up opportunities that we 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 us in a designated field. The terms of such ECCs were negotiated between us and Harvest. As consideration for providing exclusive rights of first-look and first negotiation for start-up opportunities, we received a portion of the management fee collected by the fund sponsor of Harvest. In September 2017, the commitment period for Harvest was terminated and, as a result, our agreement with Harvest terminated. The termination of the agreement had no effect on the already-established collaborations with Harvest-sponsored entities.

~~Pursuant to our business model, we may receive~~ equity in ~~lieu~~net loss of cash for technology access fees and milestones and also may participate in capital raises to allow earlier-stage collaborators to focus their resources on product development. However, when such a collaborator develops greater operational or financial resources, its shares become a financial asset within Intrexon that is independent of our operational or collaborative purposes.

~~Mergers, acquisitions, and technology in-licensing~~

We may augment our suite of proprietary technologies through mergers or acquisitions of technologies which then become available to new or existing collaborators. Among other things, we pursue technologies that we believe will be generally complementary to our existing technologies and also meet our desired return on investment and other economic criteria. In certain cases, such technologies may already be applied in the production of products or services and in these cases we may seek to expand the breadth or efficacy of such products or services through the use of our technologies.affiliates. See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 3"19" appearing elsewhere in this Quarterly Report ~~on Form 10-Q,~~ for ~~further~~a discussion of ~~mergers, acquisitions or significant technology in-licensing activities in 2017.~~our reportable segments and Segment Adjusted EBITDA.

Financial overview

We have incurred significant losses since our inception. We anticipate that we may continue to incur significant losses for the foreseeable future, and we may never achieve or maintain profitability. Our historical collaboration and licensing revenues were generated under a business model from which we have gradually transitioned, and we do not expect to expend significant resources servicing our historical collaborations in the future. We ~~have never~~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 three months ended March 31, 2021, both of these subsidiaries generated ~~any royalty revenues from sales of products by~~positive Segment Adjusted EBITDA. Products currently in our ~~collaborators and may never be profitable. Certain of our consolidated subsidiaries~~clinical pipeline will require regulatory approval and/or commercial scale-up before they may commence significant product sales and operating profits.

~~We expect our future capital requirements will be substantial, particularly as~~As we continue our efforts to ~~develop~~focus our business and ~~expand~~generate additional capital, we may be willing to enter into transactions involving one or more of our ~~synthetic biology technology platform.~~operating segments and reporting units for which we have goodwill and intangible assets. These efforts could result in us identifying impairment indicators or recording impairment charges in future periods. In ~~October 2017,~~addition, market changes and changes in judgements, assumptions, and estimates that we ~~entered into a Preferred Stock Equity Facility,~~have made in assessing the fair value of goodwill could cause us to consider some portion or Preferred Stock Facility, with an affiliate of Third Security, which will terminate no later than April 30, 2019. Our Chairman and Chief Executive Officer also serves as the Senior Managing Director and Chief Executive Officer of Third Security and owns all of ~~the outstanding equity interests. Under the Preferred Stock Facility, we may, at our sole and exclusive option, issue and sell~~certain assets to ~~the affiliate~~become impaired.

Table of Third Security, up to $100 million of newly issued Series A Redeemable Preferred Stock, or Series A Preferred Stock. We believe that our existing cash and cash equivalents, short-term investments, cash expected to be received through our current collaborators and for sales of products and services provided by our consolidated subsidiaries, and any issuances of Series A Preferred Stock under the Preferred Stock Facility will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months.Contents

Sources of revenue

~~We derive~~Historically, we have derived our collaboration and licensing revenues through ~~the execution of~~ agreements with counterparties for the development and commercialization of products enabled by our technologies. Generally, the terms of these collaborations provide that we receive some or all of the following: (i) technology access fees upon signing; (ii) reimbursements of costs

incurred by us for our research and development and/or manufacturing efforts related to specific applications provided for in the collaboration; (iii) milestone payments upon the achievement of specified development, regulatory and commercial activities; and (iv) royalties on sales of products arising from the collaboration.

Our technology access fees and milestone payments may be in the form of cash or securities of the collaborator. Our collaborations contain multiple arrangements, and we typically defer revenues from the technology access fees and milestone payments received and recognize such revenues in the future over the anticipated performance period. We are also entitled to sublicensing revenues in those situations where our collaborators choose to license our technologies to other parties.

~~From time~~As we continue to ~~time,~~shift our focus on our healthcare business, we have and ~~certain~~may continue to mutually terminate collaboration agreements or repurchase rights to the exclusive fields from collaborators, ~~may cancel the agreements,~~ relieving us of any further performance obligations under the agreement. ~~When~~Upon such circumstances or when we determine no further performance obligations are required of us under an agreement, we may recognize any remaining deferred ~~revenue.~~revenue as either collaboration revenue or as a reduction of operating expense, depending on the circumstances. See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 5" appearing elsewhere in the Quarterly Report for a discussion of changes to our significant collaborations.

We generate product and service revenues primarily through sales of products or services ~~which~~that are created from technologies developed or owned by us. Our primary current offerings arise from Trans Ova and include sales of advanced reproductive technologies, including our bovine embryo transfer and ~~in vitro fertilization~~IVF 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. ~~Revenue~~Exemplar also generates product and service revenues through the development and sale of genetically engineered miniature swine models. We recognize revenue when control of the promised product 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~~transferred to the customer ~~(iii)~~or when the ~~price~~promised service is ~~fixed or determinable, and (iv) collection from the customer is reasonably assured.~~completed.

In future periods, in connection with our focus on healthcare, our revenues will primarily depend on our ability to ~~partner~~advance and create our ~~more mature~~own programs ~~and capabilities, the number of collaborations to which we are party, the advancement and creation of programs within our collaborations~~ and the extent to which ~~our collaborators~~we bring products enabled by our technologies to market. Other than for collaboration revenues recognized upon cancellation or modification of an existing collaboration or for revenues generated pursuant to future strategic transactions for any of our existing platforms or programs, we expect our collaboration revenues will continue to decrease in the near term. Our revenues will also depend upon our ability to maintain or improve the volume and pricing of ~~our~~Trans Ova's and Exemplar's current product and service offerings and to develop and scale up production of new offerings from the various technologies of our subsidiaries. ~~Our future revenues may also include additional revenue streams~~As we ~~may acquire through mergers~~focus on our healthcare business, we anticipate that our expenses will increase substantially if, and ~~acquisitions. In light~~as, we continue to advance the preclinical and clinical development of our ~~limited operating history~~existing product candidates and ~~experience,~~our research programs. We expect a significant period of time could pass before commercialization of our various product candidates or before the achievement of contractual milestones and the realization of royalties on product candidates commercialized under our collaborations and revenues sufficient to achieve profitability. Accordingly, there can be no assurance as to the timing, magnitude, and predictability of revenues to which we might be entitled.

Cost of products and services

Cost of products and services includes primarily labor and related costs, drugs and supplies used primarily in ~~the~~Trans Ova's embryo transfer and ~~in vitro fertilization~~IVF processes, livestock and feed used in production, and facility charges, including rent and depreciation. Fluctuations in the price of livestock and feed have not had a significant impact on our operating margins and no derivative financial instruments are used to mitigate the price risk.

Research and development expenses

We recognize research and development expenses as they are incurred. Our research and development expenses consist primarily of:

•salaries and benefits, including stock-based compensation expense, for personnel in research and development functions;

•fees paid to consultants and contract research organizations who perform research on our behalf and under our direction;

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•costs related to laboratory supplies used in our research and development ~~efforts;~~efforts and acquiring, developing, and manufacturing preclinical study and clinical trial materials;

•costs related to certain in-licensed technology ~~rights;~~rights or reacquired in-process research and development;

~~depreciation of leasehold improvements and laboratory equipment;~~

•amortization of patents and related technologies acquired in mergers and acquisitions; and

•facility-related expenses, which include direct depreciation costs and unallocated expenses for rent and ~~utility costs for our research~~maintenance of facilities and ~~development facilities.~~other operating costs.

~~We have no individually significant research and development projects and our~~Our research and development expenses are generally incurred by our reportable segments and primarily relate to either ~~the~~ costs incurred to expand or otherwise improve our ~~multiple platform~~ technologies or the costs incurred to

develop ~~a specific application of~~ our ~~technologies in support of current or prospective collaborators, or costs incurred to expand or otherwise improve our~~own products and services. ~~Research~~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 ~~including costs for preclinical~~incurred by reportable segment and ~~clinical development, incurred for programs we support pursuant~~reconciles those expenses to ~~an ECC agreement are typically reimbursed by the collaborator at cost and all other~~ research and development ~~programs may be terminated or otherwise deferred at our discretion.~~ expenses on the condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020.


	Three Months Ended March 31,
	2021		2020
Biopharmaceuticals	$	10,063	$	10,641
Exemplar	74		190
Trans Ova	385		640
Total research and development expenses from reportable segments	10,522		11,471
Other research and development expenses	—		(141)
Eliminations	(1)		(3)
Total consolidated research and development expenses	$	10,521	$	11,327

The amount of ~~our~~ research and development expenses may be impacted by, among other things, the number and nature of ~~ECCs~~our own proprietary programs, and the number and size of programs we may support on behalf of ~~an ECC.~~

The table below summarizes our research and development expenses incurred to expand or otherwise improve our multiple platform technologies, the costs incurred to develop a specific application of our technologies in support of current or prospective collaborators and licensees, or costs incurred to expand or otherwise improve our products and services for the three and nine months ended September 30, 2017 and 2016. Other research and development expenses for these periods include indirect salaries and overhead expenses that are not allocated to either expanding or improving our multiple platform technologies, specific applications of our technologies in support of current or prospective collaborators and licensees, or expanding or improving our product and services offerings.

Three Months Ended
September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
(In thousands)
Expansion or improvement of our platform technologies $ 3,652
$ 3,014
$ 10,476
$ 8,881
Specific applications of our technologies in support of current and prospective collaborators and licensees 19,363
17,004
56,369
47,171
Expansion or improvement of our product and service offerings 6,917
4,245
20,030
13,012
Other 6,540
4,772
17,788
14,202
Total research and development expenses $ 36,472
$ 29,035
$ 104,663
$ 83,266

collaboration agreements. We expect that our research and development expenses will increase as we ~~enter into new collaborations,~~continue to develop our own proprietary programs, including progression of these programs into preclinical and ~~expand our offerings across additional market sectors.~~clinical stages. We believe these increases will likely include ~~increased costs related to the hiring of additional personnel in research and development functions,~~ increased costs paid to consultants and contract research organizations and increased costs related to laboratory supplies.

Research and development expenses may also increase as a result of ongoing research and development operations ~~which~~that we might assume through mergers and ~~acquisitions.~~acquisitions or in-licensing of technologies.

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, ~~sales and marketing,~~ information technology, legal, and corporate 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.

~~We expect that our~~ SG&A expenses ~~will continue to increase~~may fluctuate in the future depending on the scaling of our corporate functions required to support our ~~expanding operations as we explore new partnering opportunities~~corporate initiatives and ~~continue to develop our proprietary programs. We believe that these increases will likely include costs related to~~ the ~~hiring~~outcomes of ~~additional personnel~~legal claims and increased fees for business development functions, costs associated with defending the Company in litigation matters, the costs of outside consultants and other professional services. SG&A expenses may also increase as a result of ongoing operations which we might assume through mergers and acquisitions.assessments against us.

Other income (expense), net

~~We hold equity securities~~Interest expense is expected to increase in future periods due to the noncash amortization of the long-term debt discount and ~~preferred stock received and/or purchased from certain collaborators. Other than investments accounted for using~~debt issuance costs related to the ~~equity method discussed below, we elected the fair value option to account for our equity securities and preferred stock held~~3.50% convertible senior notes due 2023 issued in these collaborators. These equity securities and preferred stock are recorded at fair value at each reporting date. Unrealized appreciation (depreciation) resulting from fair value adjustments are reported as other income (expense) in the consolidated statementJuly 2018.

Table of ~~operations. As such, we bear the risk that fluctuations in the securities' share prices may significantly impact our results of operations.~~Contents

Interest income consists of interest earned on our cash and cash equivalents and short-term and long-term ~~investments. Dividend income consists of the monthly preferred stock dividends received from our~~ investments ~~in preferred stock.~~

~~Through September 2017, as consideration for providing exclusive rights of first-look~~ and first negotiation, we received a portion of the management fee collected by the fund sponsor of Harvest for our obligation to provide Harvest with investment proposals that were suitable for pursuit by a start-up. We expect these fees to decrease subsequent to the termination of the commitment period for Harvest as provided for in the agreement. These fees are included in other income.may fluctuate based on amounts invested and current interest rates.

Equity in net income (loss) of affiliates

Equity in net income or loss of affiliates is our pro-rata share of our equity method investments' operating results, adjusted for accretion of basis difference. We account for investments in our joint ventures, or JVs, ~~and start-up entities backed by Harvest~~ using the equity method of accounting since we have the ability to exercise significant influence, but not control, over the operating activities of these entities. We previously accounted for our investments in start-up entities backed by the Harvest Intrexon Enterprise Fund I, LP, or Harvest, using the equity method of accounting. In December 2020, we entered into an agreement with Harvest to resolve matters related to the parties' contractual and equity relationships and our remaining equity interests in start-up entities backed by Harvest were terminated.

Segment performance

We use Segment Adjusted EBITDA as our primary measure of segment performance. We define Segment Adjusted EBITDA as net income (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) gain or loss on disposals of assets, (viii) loss on impairment of goodwill and other noncurrent assets, (ix) equity in net loss of affiliates, and (x) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates, but includes proceeds from the sale of assets in the period sold. Corporate expenses are not allocated to the segments and are managed at a consolidated level. See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 19" appearing elsewhere in this Quarterly Report for further discussion of Segment Adjusted EBITDA.

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Results of operations

Comparison of the three months ended ~~September 30, 2017~~March 31, 2021 and the three months ended ~~September 30, 2016~~March 31, 2020

The following table summarizes our results of operations for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, together with the changes in those items in dollars and as a percentage:


	Three Months Ended March 31,				Dollar Change		Percent Change
	2021		2020
	(In thousands)
Revenues
Collaboration and licensing revenues (1)	$	66	$	10,721	$	(10,655)	(99.4)	%
Product revenues	6,381		4,961		1,420		28.6	%
Service revenues	17,931		13,946		3,985		28.6	%
Other revenues	133		210		(77)		(36.7)	%
Total revenues	24,511		29,838		(5,327)		(17.9)	%
Operating expenses
Cost of products	5,574		6,089		(515)		(8.5)	%
Cost of services	7,402		7,536		(134)		(1.8)	%
Research and development	10,521		11,327		(806)		(7.1)	%
Selling, general and administrative	18,702		21,486		(2,784)		(13.0)	%


Total operating expenses	42,199		46,438		(4,239)		(9.1)	%
Operating loss	(17,688)		(16,600)		(1,088)		6.6	%
Total other expense, net	(4,205)		(3,855)		(350)		9.1	%
Equity in loss of affiliates	(3)		(351)		348		(99.1)	%
Loss from continuing operations before income taxes	(21,896)		(20,806)		(1,090)		5.2	%
Income tax benefit (expense)	52		(40)		92		>200%
Loss from continuing operations	(21,844)		(20,846)		(998)		4.8	%
Income (loss) from discontinued operations, net of income taxes (2)	4,526		(35,152)		39,678		112.9	%


Net loss	$	(17,318)	$	(55,998)	$	38,680	(69.1)	%

Three Months Ended
September 30,
Dollar
Change

Percent
Change
2017 2016
(In thousands)
Revenues
Collaboration and licensing revenues $ 28,155
$ 30,590
$ (2,435 ) (8.0 )%
Product revenues 7,670
9,260
(1,590 ) (17.2 )%
Service revenues 9,975
8,706
1,269
14.6 %
Other revenues 216
429
(213 ) (49.7 )%
Total revenues 46,016
48,985
(2,969 ) (6.1 )%
Operating expenses

Cost of products 8,001
9,156
(1,155 ) (12.6 )%
Cost of services 7,013
5,803
1,210
20.9 %
Research and development 36,472
29,035
7,437
25.6 %
Selling, general and administrative 39,277
33,812
5,465
16.2 %
Total operating expenses 90,763
77,806
12,957
16.7 %
Operating loss (44,747 ) (28,821 ) (15,926 ) 55.3 %
Total other income, net 6,086
4,647
1,439
31.0 %
Equity in loss of affiliates (2,993 ) (6,255 ) 3,262
(52.2 )%
Loss before income taxes (41,654 ) (30,429 ) (11,225 ) 36.9 %
Income tax benefit 818
418
400
95.7 %
Net loss (40,836 ) (30,011 ) (10,825 ) 36.1 %
Net loss attributable to noncontrolling interests 1,147
1,029
118
11.5 %
Net loss attributable to Intrexon $ (39,689 ) $ (28,982 ) $ (10,707 ) 36.9 %

~~Collaboration~~(1)Includes $0 and ~~licensing revenues~~

~~The following table shows the collaboration and licensing revenues~~$198 from related parties for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016, together with the changes in those items.~~ 2020, respectively.

(2)See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 5"3" appearing elsewhere in this Quarterly ~~Report on Form 10-Q for further discussion of our collaboration~~Report.

Collaboration and licensing ~~revenues.~~revenues

Three Months Ended
September 30, Dollar
Change
2017 2016
(In thousands)
ZIOPHARM Oncology, Inc. $ 10,373
$ 10,429
$ (56 )
Oragenics, Inc. 475
556
(81 )
Fibrocell Science, Inc. 1,683
1,167
516
Genopaver, LLC 1,422
1,693
(271 )
S & I Ophthalmic, LLC 376
2,782
(2,406 )
OvaXon, LLC 262
709
(447 )
Intrexon Energy Partners, LLC 1,903
4,855
(2,952 )
Persea Bio, LLC 266
333
(67 )
Ares Trading S.A. 2,356
2,316
40
Intrexon Energy Partners II, LLC 816
872
(56 )
Intrexon T1D Partners, LLC 1,462
787
675
Harvest Start-up Entities (1) 4,020
1,293
2,727
Other 2,741
2,798
(57 )
Total $ 28,155
$ 30,590
$ (2,435 )

~~(1)~~

For the three months ended September 30, 2017, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; AD Skincare, Inc.; Genten Therapeutics, Inc.; and CRS Bio, Inc. For the three months ended September 30, 2016, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; and AD Skincare Inc.

Collaboration and licensing revenues decreased ~~$2.4~~$10.7 million, or ~~8 percent,~~99%, from the three months ended ~~September 30, 2016~~March 31, 2020 primarily due to recognition of previously deferred revenue which arose from the termination of a ~~decrease~~collaboration with Castle Creek in ~~research and development services for certain of our ECCs as we temporarily redeployed certain resources towards supporting prospective new platforms and partnering opportunities.~~February 2020.

Product revenues and gross margin

Product revenues ~~decreased $1.6~~increased $1.4 million, or ~~17 percent, from~~29%, over the three months ended ~~September 30, 2016.~~March 31, 2020. The ~~decrease~~increase in product ~~revenues~~revenue was primarily due to ~~lower~~higher customer demand for ~~cows~~animals as a result of stronger beef and ~~live calves.~~dairy industries in the current year. Gross margin on products ~~also decreased~~improved in the current period ~~primarily due to customer demand.~~as a result of the increased revenues, increased focus on selling higher margin products, and operational efficiencies that have been gained through reductions in workforce and improved inventory management.

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Service revenues and gross margin

Service revenues increased ~~$1.3~~$4.0 million, or ~~15 percent,~~29%, over the three months ended ~~September 30, 2016. The increase in service~~March 31, 2020. Trans Ova's revenues ~~relates~~and gross margins thereon improved primarily due to an increase in services performed as a result of higher customer demand as the ~~number of bovine~~beef and dairy industries have been stronger in ~~vitro fertilization cycles performed~~the current year and a change in pricing structure with certain customers. Additionally, Exemplar's service revenues increased in the current period due to an increase in services performed resulting from a higher ~~customer demand. Gross~~demand from existing and new customers, which also improved gross margin on ~~these~~ services ~~was consistent period over period.~~performed.

Research and development expenses

Research and development expenses ~~increased $7.4~~decreased $0.8 million, or ~~26 percent, over~~7%, from the three months ended September 30, 2016. The increase is due primarily to increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) depreciation and amortization, (iii) rent and utilities expenses, and (iv) lab supplies and consulting expenses.March 31, 2020. Salaries, benefits, and other personnel costs ~~increased $2.6~~decreased $0.7 million ~~due to an increase~~ in 2021 as we scaled down certain research and development ~~headcount necessary to invest~~functions in ~~current or expanding platforms and to develop new prospective collaborations and other partnering~~

~~opportunities. Depreciation and amortization increased $2.0 million primarily~~the first quarter of 2020 as a result of (i) the amortization of developed technology acquired from Oxitec Limited, or Oxitec, which began in November 2016 upon the completion of certain operational and regulatory events, and (ii) the amortization of developed technology acquired from GenVec, Inc., or GenVec, in June 2017. Rent and utilities expenses increased $1.4 million due to the expansion of certain facilities to support our increased headcount. Lab supplies and consulting expenses increased $1.1 million as a result of (i) the progression of certain programs ~~into the preclinical and clinical phases with certain of our collaborators and (ii) the expansion or improvement of certain of our platform technologies.~~being previously deprioritized.

Selling, general and administrative expenses

SG&A expenses ~~increased $5.5~~decreased $2.8 million, or ~~16 percent, over~~13%, from the three months ended ~~September 30, 2016.~~March 31, 2020. Salaries, benefits, and other personnel costs ~~increased $2.7~~decreased $1.0 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. Professional fees decreased $1.0 million primarily due to ~~(i) increased headcount to support our expanding operations and (ii) increased stock-based compensation expense resulting from grants to certain of our officers~~a decrease in ~~February 2017. Legal and professional fees increased $0.9 million primarily due to (i) increased~~ legal fees ~~to defend ongoing~~associated with certain litigation ~~and (ii) increased fees incurred for business development and prospective partnering efforts.~~matters that were settled in the second half of 2020.

~~Total other income, net~~Segment performance

~~Total other income, net, increased $1.4 million or 31 percent, over the three months ended September 30, 2016. This increase was primarily attributable to (i) increases in fair market value~~The following table summarizes Segment Adjusted EBITDA, which is our primary measure of ~~our equity securities portfolio and (ii) dividend income from our investments in preferred stock.~~

~~Equity in net loss of affiliates~~

~~Equity in net loss of affiliates~~segment performance, for the three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016 includes our pro-rata share of the net losses~~2020, for each of our ~~investments we account for using the equity method~~reportable segments as well as unallocated corporate costs.


	Three Months Ended March 31,				Dollar Change		Percent Change
	2021		2020
	(In thousands)
Segment Adjusted EBITDA:
Biopharmaceuticals	$	(8,854)	$	(10,022)	$	1,168	11.7	%
Exemplar	1,806		250		1,556		>200%
Trans Ova	6,421		(457)		6,878		>200%
Unallocated corporate costs	(8,194)		(10,838)		2,644		(24.4)	%

For a reconciliation of ~~accounting. The $3.3 million, or 52 percent, decrease~~Segment Adjusted EBITDA to net loss from ~~the three months ended September 30, 2016 was primarily due~~continuing operations before income taxes, see "Notes to the ~~temporary redeployment of certain resources away from these JV programs towards supporting prospective new platforms and additional collaborations.~~

~~Comparison of the nine months ended September 30, 2017 and the nine months ended September 30, 2016~~

~~The following table summarizes our results of operations for the nine months ended September 30, 2017 and 2016, together with the changes in those items in dollars and as a percentage:~~

Nine Months Ended
September 30,
Dollar
Change

Percent
Change
2017 2016
(In thousands)
Revenues
Collaboration and licensing revenues $ 89,384
$ 82,144
$ 7,240
8.8 %
Product revenues 25,780
28,699
(2,919 ) (10.2 )%
Service revenues 37,890
33,298
4,592
13.8 %
Other revenues 899
783
116
14.8 %
Total revenues 153,953
144,924
9,029
6.2 %
Operating expenses
Cost of products 25,625
29,471
(3,846 ) (13.1 )%
Cost of services 21,805
17,807
3,998
22.5 %
Research and development 104,663
83,266
21,397
25.7 %
Selling, general and administrative 113,258
106,956
6,302
5.9 %
Total operating expenses 265,351
237,500
27,851
11.7 %
Operating loss (111,398 ) (92,576 ) (18,822 ) 20.3 %
Total other income (expense), net 27,632
(39,125 ) 66,757
170.6 %
Equity in loss of affiliates (11,273 ) (16,951 ) 5,678
(33.5 )%
Loss before income taxes (95,039 ) (148,652 ) 53,613
(36.1 )%
Income tax benefit 2,164
3,290
(1,126 ) (34.2 )%
Net loss (92,875 ) (145,362 ) 52,487
(36.1 )%
Net loss attributable to noncontrolling interests 3,123
2,887
236
8.2 %
Net loss attributable to Intrexon $ (89,752 ) $ (142,475 ) $ 52,723
(37.0 )%

~~Collaboration and licensing revenues~~

~~The following table shows the collaboration and licensing revenues for the nine months ended September 30, 2017 and 2016, together with the changes in those items. See "Notes to the~~Condensed Consolidated Financial Statements (Unaudited) - Note 5"19" appearing elsewhere in this Quarterly ~~Report on Form 10-Q~~Report.

The following table summarizes revenues from external customers for ~~further discussion~~the three months ended March 31, 2021 and 2020, for each of our ~~collaboration and licensing revenues.~~reportable segments.


	Three Months Ended March 31,				Dollar Change		Percent Change
	2021		2020
	(In thousands)
Biopharmaceuticals	$	178	$	10,862	$	(10,684)	(98.4)	%
Exemplar	3,257		2,151		1,106		51.4	%
Trans Ova	21,076		16,785		4,291		25.6	%

Nine Months Ended
September 30, Dollar
Change
2017 2016
(In thousands)
ZIOPHARM Oncology, Inc. $ 31,322
$ 24,380
$ 6,942
Oragenics, Inc. 1,519
1,869
(350 )
Fibrocell Science, Inc. 5,375
4,418
957
Genopaver, LLC 4,615
4,908
(293 )
S & I Ophthalmic, LLC 751
6,326
(5,575 )
OvaXon, LLC 1,966
2,211
(245 )
Intrexon Energy Partners, LLC 8,909
13,055
(4,146 )
Persea Bio, LLC 821
988
(167 )
Ares Trading S.A. 8,474
6,939
1,535
Intrexon Energy Partners II, LLC 2,921
2,316
605
Intrexon T1D Partners, LLC 3,882
1,097
2,785
Harvest Start-up Entities (1) 11,835
2,666
9,169
Other 6,994
10,971
(3,977 )
Total $ 89,384
$ 82,144
$ 7,240
Biopharmaceuticals

~~(1)~~

For the nine months ended September 30, 2017, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc.; AD Skincare, Inc.; Genten Therapeutics, Inc.; and CRS Bio, Inc. For the nine months ended September 30, 2016, revenue recognized from collaborations with Harvest start-up entities include Thrive Agrobiotics, Inc.; Exotech Bio, Inc.; Relieve Genetics, Inc; and AD Skincare, Inc.

~~Collaboration and licensing revenues increased $7.2 million, or 9 percent, over the nine months ended September 30, 2016 primarily~~The decrease in Biopharmaceuticals revenue was due to the accelerated recognition of previously deferred revenue upon the mutual termination of a collaboration with Castle Creek in February 2020. Segment Adjusted EBITDA improved as we deprioritized certain programs and scaled down certain research and development functions in the first quarter of 2020 but were partially offset by increases in costs associated with ~~the payment received in June 2016 from ZIOPHARM to amend~~ our ~~collaborations~~clinical and ~~increased revenues associated with collaborations entered into with the Harvest start-up entities in 2016.~~preclinical programs.

~~Product revenues and gross margin~~

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~~Product revenues decreased $2.9 million, or 10 percent, from the nine months ended September 30, 2016. The decrease in product revenues was primarily due to lower customer demand~~Exemplar

Revenues for ~~cows and live calves. Gross margin on products improved in the current period primarily due to a decline in the average cost of cows.~~

~~Service revenues and gross margin~~

~~Service revenues~~Exemplar increased $4.6 million, or 14 percent, over the nine months ended September 30, 2016. The increase in service revenues relates to an increase in the number of bovine in vitro fertilization cycles performed due to higher customer demand. Gross margin on services decreased slightly in the current period primarily due to an increase in ~~royalties and commissions due to vendors.~~

~~Research and development expenses~~

Research and development expenses increased $21.4 million, or 26 percent, over the nine months ended September 30, 2016. The increase is due primarily to increases in (i) salaries, benefits and other personnel costs for research and development employees, (ii) lab supplies and consulting expenses, (iii) depreciation and amortization, and (iv) rent and utilities expenses.

Salaries, benefits and other personnel costs increased $7.4 million due to an increase in research and development headcount necessary to invest in current or expanding platforms and to develop new prospective collaborations and other partnering opportunities. Lab supplies and consulting expenses increased $6.3 million due to (i) the progression of certain programs into the preclinical and clinical phases with certain of our collaborators and (ii) the expansion or improvement of certain of our platform technologies. Depreciation and amortization increased $4.3 million primarily as a result of (i) the amortization of developed technology acquired from Oxitec, which began in November 2016 upon the completion of certain operational and regulatory events, and (ii) the amortization of developed technology acquired from GenVec in June 2017. Rent and utilities expenses increased $2.5 million due to the expansion of certain facilities to support our increased headcount.

~~Selling, general and administrative expenses~~

SG&A expenses increased $6.3 million, or 6 percent, over the nine months ended September 30, 2016. Salaries, benefits and other personnel costs increased $4.2 million primarily due to (i) increased headcount to support our expanding operations and (ii) increased stock-based compensation expenseservices performed resulting from ~~grants to certain of our officers~~a higher demand from existing and new customers. The improvement in February 2017. Legal and professional fees increased $4.7 million primarily due to (i) increased legal fees to defend ongoing litigation, (ii) increased business development and public relations consulting expenses, and (iii) our acquisition of GenVec in June 2017. These increases were offset by $4.2 million in litigation expenses recorded in the prior period arising from the entrance of a court order in our trial with XY, LLC.

~~Total other income (expense), net~~

Total other income (expense), net, increased $66.8 million, or 171 percent, over the nine months ended September 30, 2016. This increase was primarily attributable to (i) increases in fair market value of our equity securities portfolio, investments in preferred stock, and other convertible instruments and (ii) dividend income from our investments in preferred stock.

~~Equity in net loss of affiliates~~

Equity in net loss of affiliates for the nine months ended September 30, 2017 and 2016 includes our pro-rata share of the net losses of our investments we account for using the equity method of accounting. The $5.7 million, or 33 percent, decreaseSegment Adjusted EBITDA was primarily due to the ~~temporary redeployment~~increased revenues and reduced costs as a result of operational efficiencies gained through reductions in workforce and improved inventory management.

Trans Ova

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 ~~resources away from these JV programs towards supporting prospective new platforms~~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 ~~additional collaborations.~~improved inventory management.

Unallocated Corporate Costs

Unallocated corporate costs decreased primarily due to a reduction of corporate employees as we scaled down our corporate functions to support our more streamlined organization, as well as a decrease in certain professional fees associated with certain litigation matters that were settled in the second half of 2020.

Liquidity and capital resources

Sources of liquidity

We have incurred losses from operations since our inception, and as of ~~September 30, 2017,~~March 31, 2021, we had an accumulated deficit of ~~$820.6 million.~~$1.8 billion. From our inception through ~~September 30, 2017,~~March 31, 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, 2017,~~March 31, 2021, we had cash and cash equivalents of ~~$64.2~~$27.4 million and short-term and long-term investments of ~~$44.5~~$181.9 million. Additionally, in October 2017, we entered into the Preferred Stock Facility with an affiliate of Third Security through which we may draw an additional $100 million through the issuance of Series A Preferred Stock. Cash in excess of immediate requirements is typically invested primarily in money market funds and U.S. government debt securities in order to maintain liquidity and preserve capital.

We currently generate cash receipts primarily from ~~technology access fees, reimbursement of research and development services performed by us and~~ sales of products and ~~services.~~services and from strategic transactions.

As of March 31, 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.

Cash flows

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


	Nine Months Ended September 30,							Three Months Ended March 31,
	2017			2016				2021		2020
	(In thousands)							(In thousands)
Net cash provided by (used in):							Net cash provided by (used in):
Operating activities	$	(70,259	)	$	(31,780	)	Operating activities	$	(16,384)	$	(27,743)
Investing activities	80,418			(45,144		)	Investing activities	(129,102)		(36,553)
Financing activities	(9,420		)	11,162			Financing activities	121,040		34,151
Effect of exchange rate changes on cash and cash equivalents	870			(313		)
Net increase in cash and cash equivalents	$	1,609		$	(66,075	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash							Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(11)		(39)
Net decrease in cash, cash equivalents, and restricted cash							Net decrease in cash, cash equivalents, and restricted cash	$	(24,457)	$	(30,184)

Cash flows from operating activities:

~~Our current period~~During the three months ended March 31, 2021, our net loss ~~of $92.9~~was $17.3 million, ~~after adjustment for~~which includes the following significant noncash ~~items of~~expenses totaling $12.3 million from both continuing and discontinued operations: (i) ~~$31.9~~$5.4 million of stock-based compensation expense, (ii) ~~$22.9~~$3.5 million of depreciation and amortization expense, (iii) ~~$12.3~~$2.8 million accretion of debt discount and amortization of deferred financing costs, and (iv) $0.6 million of shares issued as payment for services. These expenses

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were partially offset by a $4.6 million noncash ~~dividend income, (iv) $11.3~~gain recognized upon the termination of our MBP Titan facility lease in January 2021.

During the three months ended March 31, 2020, our net loss was $56.0 million, which includes the following significant noncash expenses totaling $40.0 million from both continuing and discontinued operations: (i) $27.0 million of ~~equity in net loss~~accumulated foreign currency translation losses that were realized upon the closing of ~~affiliates, (v) $9.2~~the Transactions, (ii) $4.8 million of ~~noncash net unrealized~~depreciation and ~~realized gains on our equity securities~~amortization expense, (iii) $4.4 million of stock-based compensation expense, (iv) $2.5 million accretion of debt discount and ~~preferred stock, and (vi) $8.4~~amortization of deferred financing costs, (v) $0.9 million of shares issued as payment for services, ~~was $39.9 million. Additionally, we had a $29.1 million net increase in our operating assets~~ and liabilities primarily as a result of the recognition of previously deferred revenue. Our prior period net loss of $145.4 million, after deduction of significant noncash items of (i) $45.4 million of noncash unrealized losses on our equity securities, (ii) $30.6 million of stock-based compensation expense, (iii) $17.7 million of depreciation and amortization expense, (iv) $17.0(vi) $0.4 million of equity in net loss of ~~affiliates, and (v) $8.3 million~~affiliates. These expenses were partially offset by the recognition of ~~shares issued as payment for services, was $26.4 million. Also during the nine months ended September 30, 2016, we received a~~ $10.0 million ~~technology access fee pursuant to a new collaboration and had an additional $12.7 million net increase in our operating assets and liabilities primarily as a result of the recognition~~ of previously deferred revenue upon the mutual termination of a collaboration with Castle Creek in February 2020.

Our cash outflows from operations during the three months ended March 31, 2021 decreased $11.4 million from the three months ended March 31, 2020 primarily due to (i) increased cash flows provided by Trans Ova and ~~payments~~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 ~~accrued compensation.~~2020, and (iii) reductions in operating expenses for our ActoBio and corporate operations as we streamlined both in order to further prioritize the use of our capital.

Cash flows from investing activities:

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, we ~~received~~purchased $133.7 million of investments, net of maturities and sales, primarily using the proceeds ~~of $136.3 million~~received from the maturity of short-term investments and used $32.7 million for purchases of property, plant and equipment, $14.2 million for the purchase of a land-based aquaculture facility by AquaBounty Technologies, Inc., or AquaBounty, and $10.6 million for investments in our JVs. underwritten public offering discussed below.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2020, we ~~used $20.2 million in purchases of property, plant and equipment, $9.4 million for investments in our JVs, $7.2 million to acquire the assets of EnviroFlight, LLC, and~~ purchased ~~$3.3~~$101.3 million of investments, net ~~short-term~~of maturities, primarily using the $64.2 million of proceeds received from the Transactions, net of cash sold, and ~~long-term investments.~~the private placement discussed below.

Cash flows from financing activities:

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, we ~~paid $8.7~~received $121.0 million net proceeds from the sale of ~~deferred consideration to former shareholders of acquired businesses.~~ our common stock in an underwritten public offering.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2020, we received ~~$18.2~~$35.0 million proceeds from the sale of our common stock ~~option exercises and paid $6.7 million of deferred consideration~~in a private placement to ~~former shareholders of an acquired business.~~TS Biotechnology Holdings, LLC.

Future capital requirements

We established our strategy and business model of commercializing our technologies through collaborations with development expertise in 2010, and we consummated our first collaboration in January 2011. We believe that our efforts to partner our more mature programs and capabilities and to continue to consummate collaborations across our various market sectors will result in additional upfront, milestone and cost recovery payments in the future.

~~We believe that~~ our existing cash and cash equivalents, short-term investments, cash expected to be received from our current collaborators and for sales of products and services provided by our consolidated subsidiaries, and proceeds received from any issuance of Series A Preferred Stock under the Preferred Stock Facilityliquid assets will enable us to fund our operating expenses and capital ~~expenditure~~ requirements for at least the next 12 months.

~~We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.~~ Our future capital requirements will depend on many factors, including:

•progress in our research and development programs, as well as the magnitude of these programs;

•any delays or potential delays to our clinical trials as a result of the COVID-19 pandemic;

•the timing of regulatory approval of our product candidates and those of our collaborations;

•the timing, receipt, and amount of any payments received in connection with strategic transactions;

•the timing, receipt, and amount of upfront, milestone, and other payments, if any, from present and future collaborators, if any;

•the timing, receipt, and amount of sales and royalties, if any, from our ~~potential products;~~product candidates;

•the timing and capital requirements to scale up our ~~ability to maintain or improve the volume and pricing of our current~~various product candidates and service offerings and ~~to develop new offerings, including those which may incorporate new technologies;~~customer acceptance thereof;

~~the timing, receipt and amount of funding under future government contracts, if any;~~

•our ability to maintain and establish additional collaborative arrangements and/or new ~~business~~strategic initiatives;

~~the timing of regulatory approval of products of our collaborations and operations;~~

•the resources, time, and cost required for the preparation, filing, prosecution, maintenance, and enforcement of ~~patent claims;~~our intellectual property portfolio;

~~investments we may make in current and future collaborators, including JVs;~~

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•strategic mergers and acquisitions, if any, including both the upfront acquisition cost as well as the cost to integrate, maintain, and expand the strategic target; ~~and~~

•the costs associated with legal activities, including litigation, arising in the course of our business activities and our ability to prevail in any such legal ~~disputes.~~disputes; and

•the effects, duration, and severity of the ongoing COVID-19 pandemic and the actions we have taken or may take in response, any of which could significantly impact our business, operations, and financial results.

Until such time, if ever, as we can regularly generate positive operating cash flows, we ~~may~~plan to finance our cash needs through a combination of equity offerings, ~~including issuances from the Preferred Stock Facility;~~ debt ~~financings;~~financings, government, or other third-party ~~funding;~~funding, strategic alliances, sales of assets, and licensing arrangements. As the COVID-19 pandemic continues to negatively impact the economy, our future access to capital on favorable terms may be materially impacted. We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Our current stock price may make it more difficult to pursue equity financings and lead to substantial dilution if the price of our common stock does not increase. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through ~~government or other third-party funding, marketing and distribution arrangements or other~~strategic transactions, collaborations, ~~strategic alliances~~ or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or to grant licenses on terms that may not be favorable to us.

We are subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of product candidates. Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development, and clinical manufacturing of its product candidates. Our success is dependent upon our ability to continue to raise additional capital in order to fund ongoing research and development, obtain regulatory approval of our products, successfully commercialize our products, generate revenue, meet our obligations, and, ultimately, attain profitable operations. Our ability to achieve what is necessary for our success may be negatively impacted by the uncertainty caused by the COVID-19 pandemic.

See the section entitled "Risk Factors" in our Annual Report for additional risks associated with our substantial capital requirements.

Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments from continuing operations as of ~~September 30, 2017~~March 31, 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
	(In thousands)
Operating leases	$	11,803	$	3,520	$	5,008	$	2,685	$	590


Convertible debt (1)	200,000		—		200,000		—		—
Cash interest payable on convertible debt	17,500		7,000		10,500		—		—
Long-term debt, excluding convertible debt	3,619		358		765		773		1,723

Total	$	232,922	$	10,878	$	216,273	$	3,458	$	2,313

(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.

Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years
(In thousands)
Operating leases $ 64,352
$ 7,314
$ 16,131
$ 13,699
$ 27,208
Purchase commitments 10,618
3,373
7,245
—
—
Long term debt 6,004
434
816
1,194
3,560
Contingent consideration 2,911
—
2,911
—
—
$ 83,885
$ 11,121
$ 27,103
$ 14,893
$ 30,768

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In addition to the obligations in the table above, as of ~~September 30, 2017~~March 31, 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 ~~of at least $45.0 million to the JVs,~~ subject to certain conditions and limitations. As of ~~September 30, 2017,~~March 31, 2021, our remaining capital contribution commitments to our JVs were ~~$19.2~~$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.

We are party to in-licensed research and development agreements with various academic and commercial institutions where we could be required to make future payments for annual maintenance fees as well as for milestones and royalties we might receive upon commercial sales of products ~~which~~that incorporate their technologies. These agreements are generally subject to termination by us and therefore no amounts are included in the tables above. ~~At September 30, 2017,~~As of March 31, 2021, we also had research and development commitments with third parties totaling ~~$9.5~~$15.2 million that had not yet been incurred.

In January 2015, we and ZIOPHARM jointly entered into a license agreement with the University of Texas MD Anderson Cancer Center, or MD Anderson, whereby we received an exclusive license to certain technologies owned by MD Anderson. ZIOPHARM will receive access to these technologies pursuant to the terms of our ECC. We and ZIOPHARM are obligated to reimburse MD Anderson for out of pocket expenses for maintaining patents covering the licensed technologies. These reimbursements are not included in the table above due to the uncertainty of the timing and amounts of such reimbursements.

As part of our August 2014 acquisition of Trans Ova, we agreed to pay a portion of certain cash proceeds received from the litigation with XY. These amounts are not included in the table above due to the uncertainty of whether and when any amounts may be due.

In conjunction with a prior transaction associated with Trans Ova's subsidiary, ViaGen, L.C., or ViaGen, in September 2012, we may be obligated to make certain future contingent payments to the former equity holders of ViaGen, up to a total of $3.0 million if certain revenue targets, as defined in the share purchase agreement, are met. This amount is not included in the table above due to the uncertainty of when we will make any of these future payments, if ever.

In January 2009, AquaBounty was awarded a grant to provide funding of a research and development project from the Atlantic Canada Opportunities Agency, a Canadian government agency. Amounts claimed by AquaBounty must be repaid in the form of a 10 percent royalty on any products commercialized out of this research and development project until fully paid. Because the timing of commercialization is subject to additional regulatory considerations, the timing of repayment is uncertain. AquaBounty claimed all amounts available under the grant, resulting in total long term debt of $2.1 million on our consolidated financial statements as of September 30, 2017. This amount is not included in the table above due to the uncertainty of the timing of repayment.

Net operating losses

As of ~~September 30, 2017,~~March 31, 2021, we had net operating loss carryforwards of approximately ~~$243.7~~$796.6 million for U.S. federal income tax purposes available to offset future taxable income, including ~~approximately $13.4~~$543.9 million ~~acquired in our acquisition~~generated after 2017, U.S. capital loss carryforwards of ~~GenVec,~~$211.5 million, and U.S. federal and state research and development tax credits of approximately ~~$7.8~~$10.3 million, prior to consideration of annual limitations that may be imposed under Section 382 of the Internal Revenue Code of 1986, as amended, or

Section 382. ~~These~~Net operating loss carryforwards generated prior to 2018 begin to expire in ~~2022.~~2022, and capital loss carryforwards will expire if unutilized beginning in 2024. Our ~~direct~~ foreign subsidiaries included in continuing operations have foreign loss carryforwards of approximately ~~$146.8~~$78.1 million, most of which do not expire. Excluding certain deferred tax liabilities totaling ~~$15.9~~$2.7 million, our remaining net deferred tax assets, which primarily relate to these loss carryforwards, are offset by a valuation allowance due to our history of net losses.

~~Our~~As a result of our past issuances of stock, ~~and~~as well as due to prior mergers and acquisitions, ~~have resulted in ownership changes within the meaning of Section 382. As a result, the utilization of portions~~certain of our net operating losses ~~may be~~have been subject to ~~annual limitations.~~limitations pursuant to Section 382. As of ~~September 30, 2017, approximately $15.1 million of our domestic~~March 31, 2021, Precigen has utilized all net operating losses ~~generated prior~~subject to ~~2008 are limited by~~ Section 382 ~~to annual usage limits of approximately $1.5 million.~~limitations, other than those losses inherited via acquisitions. As of ~~September 30, 2017,~~March 31, 2021, approximately ~~$33.6~~$42.1 million of domestic net operating losses were inherited via ~~acquisition~~acquisitions and are limited based on the value of the ~~respective targets~~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 ~~other than operating leases and purchase commitments as mentioned above,~~ as defined under Securities and Exchange Commission, or SEC, rules.

Critical accounting policies and estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which we have prepared in accordance with generally accepted accounting principles in the United ~~States, or U.S. GAAP.~~States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual ~~Report on Form 10-K for the year ended December 31, 2016.~~Report.

Recent accounting pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 2" appearing elsewhere in this Quarterly ~~Report on Form 10-Q.~~Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following sections provide quantitative information on our exposure to interest rate ~~risk, stock price risk, and foreign currency exchange~~ risk. We make use of sensitivity analyses ~~which~~that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

Interest rate risk

We had cash, cash equivalents and short-term and long-term investments of ~~$108.7~~$209.3 million and ~~$243.2~~$100.1 million ~~at September 30, 2017~~as of March 31, 2021 and December 31, ~~2016,~~2020, respectively. Our cash and cash equivalents and short-term and long-term investments consist of cash, money market funds, U.S. government debt securities, ~~corporate notes and bonds,~~ and certificates of deposit. The primary ~~objective~~objectives of our investment activities isare to preserve principal, maintain liquidity, and maximize income without significantly increasing risk. Our investments consist of U.S. government debt securities ~~corporate notes and bonds,~~ and certificates of deposit, which may be subject to market risk due to changes in prevailing interest rates that may cause the fair values of our investments to fluctuate. We believe that a hypothetical 100 basis point increase in interest rates would not materially affect the fair value of our interest-sensitive financial instruments and any such losses would only be realized if we sold the investments prior to maturity.

~~Investments in publicly traded companies' common stock~~

We have common stock investments in several publicly traded companies that are subject to market price volatility. We have adopted the fair value method of accounting for these investments, except for our investment in AquaBounty as further described below, and therefore, have recorded them at fair value at the end of each reporting period with the unrealized gain or loss recorded as a separate component of other income (expense), net for the period. As of September 30, 2017 and December 31, 2016, the original aggregate cost basis of these investments was $102.6 million and $104.0 million, respectively, and the market value was $26.6 million and $23.5 million, respectively. The fair value of these investments is subject to fluctuation in the future due to the volatility of the stock market, changes in general economic conditions and changes in the financial conditions of these companies. The fair value of these investments as of September 30, 2017 would be approximately $29.3 million and $21.3 million, respectively, based on a hypothetical 10 percent increase or 20 percent decrease in the value of the investments. The fair value of these investments as of December 31, 2016 would be approximately $25.9 million and $18.8 million, respectively, based on a hypothetical 10 percent increase or 20 percent decrease in the value of the investments.

The common stock of AquaBounty commenced trading on the NASDAQ Stock Market in January 2017 and ceased trading on the London Stock Exchange in May 2017. As of September 30, 2017, we owned 5,162,277 shares or approximately 58 percent of AquaBounty. The fair value of our investment in AquaBounty as of September 30, 2017 and December 31, 2016 was $36.7 million and $40.1 million, respectively, based on AquaBounty's quoted closing price on the NASDAQ Stock Market and London Stock Exchange, respectively. The fair value of our investment in AquaBounty as of September 30, 2017 would be approximately $40.4 million and $29.4 million, respectively, based on a hypothetical 10 percent increase or 20 percent decrease in the share price of AquaBounty. The fair value of our investment in AquaBounty as of December 31, 2016 would be approximately $44.1 million and $32.1 million, respectively, based on a hypothetical 10 percent increase or 20 percent decrease in the share price of AquaBounty.

~~Investments in publicly traded companies' preferred stock~~

We have preferred stock investments in two publicly traded companies, which may be converted to common stock in the future. We have adopted the fair value method of accounting for these investments whereby the value of preferred stock is adjusted to fair value as of each reporting date. As of September 30, 2017 and December 31, 2016, the original cost basis of these investments, including dividends, was $140.5 million and $127.4 million, respectively, and the fair value of these investments was $148.5 million and $129.5 million, respectively. The fair value of these investments is subject to fluctuation in the future due to, among other things, the likelihood and timing of conversion of the preferred stock into common stock, the volatility of each company's common stock, and changes in general economic and financial conditions of these companies. The fair value of these investments as of September 30, 2017 would be approximately $163.4 million and $118.8 million, respectively, based on a hypothetical 10 percent increase or 20 percent decrease in the value of the investments. The fair value of these investments as of December 31, 2016 would be approximately $142.5 million and $103.6 million, respectively, based on a hypothetical 10 percent increase or 20 percent decrease in the value of the investments.

~~Foreign currency exchange risk~~

We have international subsidiaries in Belgium, Brazil, Canada, England, and Hungary. These subsidiaries' assets, liabilities, and current revenues and expenses are denominated in their respective foreign currency. We do not hedge our foreign currency exchange rate risk. The effect of a hypothetical 10 percent change in foreign currency exchange rates applicable to our business would not have a material impact on our consolidated financial statements.

Item 4. Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we carried out an evaluation, under supervision and with the participation of our management, including our Chief Executive Officer ("CEO"), who is our principal executive officer, and our ~~Chief Financial Officer~~Vice President, Finance & Accounting ("~~CFO"~~VPFA"), who is our interim principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rule 13a-15(e) and ~~15(d)-15(e)~~15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, as of the end of the period covered by this report, our CEO and ~~CFO~~VPFA concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and ~~CFO,~~VPFA, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during the three months ended ~~September 30, 2017,~~March 31, 2021, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

WeIn the course of our business, we are involved in litigation or legal matters, ~~incidental~~including governmental investigations. Such matters are subject to ~~our business activities. While the outcome~~many uncertainties and outcomes are not predictable with assurance. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of ~~these matters cannot be predicted with certainty,~~March 31, 2021, we do not ~~currently expect~~believe that any ~~of these~~such matters, individually or in the aggregate, will have a material adverse effect on our business, or financial ~~position. However, should one or more of these matters be resolved in a manner adverse to our current expectation, the effect on our~~condition, results of operations, ~~for a particular fiscal reporting period could be material.~~or cash flows.

~~In May 2016, two putative shareholder class action lawsuits, captioned~~ ~~Hoffman v. Intrexon Corporation et al.~~ ~~and~~ ~~Gibrall v. Intrexon Corporation et al.~~, were filed in the U.S. District Court for the Northern District of California on behalf of purchasers of our common stock between May 12, 2015 and April 20, 2016, or the Class Period. In July 2016, the court consolidated the lawsuits and appointed a lead plaintiff. The consolidated amended complaint names as defendants us and certain of our current and former officers, or the Defendants. It alleges, among other things, that the Defendants made materially false and/or misleading statements during the Class Period with respect to our business, operations, and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended. The plaintiffs' claims are based in part upon allegations in a report published in April 2016 on the Seeking Alpha financial blog. The plaintiffs seek compensatory damages, interest and an award of reasonable attorneys' fees and costs. The Defendants moved to dismiss the case. On February 24, 2017, the court granted our motion to dismiss the lawsuit on the grounds that the plaintiff failed to state a claim, while granting the plaintiff leave to amend. The plaintiff subsequently notified the court that it would seek to appeal the court's ruling rather than amend its complaint. On April 26, 2017, the court entered final judgment in the case. Notice of appeal was filed by the plaintiff on May 26, 2017. On October 26, 2017, the plaintiff filed a voluntary motion to dismiss the case, which the court of appeals granted on November 1, 2017.

~~In July 2016, a putative shareholder derivative action captioned~~ ~~Basile v. Kirk et al.~~ was filed in the Circuit Court of Fairfax County, Virginia, against certain of our directors, our CEO, and Third Security, and naming us as a nominal defendant. The complaint alleges causes of action for breaches of fiduciary duty and unjust enrichment relatingSee "Notes to the entry by us into the Services Agreement with Third Security. The plaintiff seeks, among other things, damages in an unspecified amount, disgorgement of improper benefits, appropriate equitable relief, and an award of attorney fees and other costs and expenses. The complaint is substantially similar to two separate demands made by shareholders concerning the Services Agreement and Mr. Kirk's compensation. Our board of directors appointed a Special Litigation Committee, or the SLC, consisting of independent directors to investigate the claims and allegations made in the derivative action and in the two shareholder demands and to decide on our behalf whether the claims and allegations should be pursued. The ~~Basile~~ case was stayed pending the report of the SLC. In November 2016, the SLC completed its review and evaluation and unanimously determined that the claims were without merit because the compensation arrangements were the result of an informed and disinterested decision-making process and were fair to the Company, and that prosecution of the asserted claims was not in our or our shareholders' best interest. Based upon the determination of the SLC, on February 24, 2017 we moved to dismiss the court action pursuant to Virginia statute. On June 8, 2017, the court granted our motion to dismiss while granting the plaintiff leave to amend. On August 30, 2017, the plaintiff filed a consent motion for leave to amend along with the amended shareholder derivative complaint. The Company moved to dismiss the amended complaint on October 6, 2017. We intend to continue to defend the lawsuit vigorously. There can be no assurance, however, regarding the ultimate outcome of the case.

In addition to the shareholder demands described above, in June and July 2016, two shareholders made separate demands under Virginia law demanding that we file suit against certain of our current officers and directors for alleged breaches of fiduciary duty and other claims. The demands were based upon and asserted the allegations previously published in April 2016 in the Seeking Alpha financial blog. In July 2016, our board of directors authorized the SLC to expand its review to include all such allegations. In February 2017, the SLC completed its review and evaluation and unanimously determined that there was no basis for any of the allegations, that our officers and directors did not breach their fiduciary duties or any other applicable law, and that prosecution of the asserted claims was not in our or our shareholders' best interest. Following the SLC's determination, in March 2017, one of the putative shareholders filed a derivative complaint captioned ~~Luger v. Kirk et al.~~ ~~in the Circuit Court of Fairfax County, Virginia. We are a nominal defendant~~Condensed Consolidated Financial Statements - Note 16" appearing elsewhere in this ~~action, and other defendants include certain~~Quarterly Report for further discussion of our directors, our CEO, and Third Security. The complaint alleges causes of action for breaches of fiduciary duty and unjust enrichment relating to our entry into the Services Agreement with Third Security, our CEO's compensation, and certain allegations contained in the April 2016 Seeking Alpha financial blog piece. Based on the determination of the SLC and a review of applicable law, we intend to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of this case.ongoing legal matters.

The Division of Enforcement of the SEC is conducting an investigation which we believe concerns certain issues raised by the foregoing matters. We have met with the SEC staff and are voluntarily cooperating with their investigation. Our board of directors has authorized the SLC to monitor our interaction with the SEC staff.

Item 1A. Risk Factors

As disclosed in "Summary of Risk Factors" and "Item 1A. Risk Factors" in our Annual Report, ~~on Form 10-K for the year ended December 31, 2016,~~ there are a number of risks and uncertainties that may have a material effect on the operating results of our business and our financial condition. There are no additional material updates or changes to our risk factors since the filing of our Annual ~~Report on Form 10-K for the year ended December 31, 2016, except as follows:~~

Randal J. Kirk controls approximately 47 percent of our common stock as of September 30, 2017, and is able to control or significantly influence corporate actions, which may result in Mr. Kirk taking actions contrary to the desires of our other shareholders.

We have historically been controlled, managed and principally funded by Randal J. Kirk, our Chairman and Chief Executive Officer, and affiliates of Mr. Kirk, including Third Security. As of September 30, 2017, Mr. Kirk and shareholders affiliated with him beneficially owned approximately 47 percent of our voting stock. In addition, pursuant to our Preferred Stock Facility, we may, from time to time at our sole and exclusive option, issue and sell to an affiliate of Mr. Kirk up to 1,000,000 shares of our Series A Preferred Stock, which will be convertible into shares of our common stock upon the approval of our shareholders, subject to regulatory approval, at a conversion rate based on future market prices. Mr. Kirk is able to control or significantly influence all matters requiring approval by our shareholders, including the election of directors and the approval of mergers or other business combination transactions. The interests of Mr. Kirk may not always coincide with the interests of other shareholders, and he may take actions that advance his personal interests and are contrary to the desires of our other shareholders.Report.

In connection with the Preferred Stock Facility, we have filed an amendment to our articles of incorporation to set the designations of our new Series A Preferred Stock with terms that are preferential to those of our common stock.

Our articles of incorporation authorize us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as our board of directors may determine. In connection with our Preferred Stock Facility, we filed an amendment to our articles of incorporation to set the designations of our Series A Preferred Stock, which, if and when issued, will have certain preferences over our common stock, including accrued dividends of 8 percent per annum and, subject to limited exceptions, seniority to our common stock with respect to the rights to the payment of dividends and on parity with our common stock with respect to the distribution of assets in the event of a liquidation, dissolution, or winding up or change of control of the Company.

~~After December 31, 2020, the holder of the Series A Preferred Stock, if and when issued, may require us to redeem any or all of the outstanding Series A Preferred Stock.~~

If we are unable to obtain the approval of our shareholders to convert any outstanding shares of Series A Preferred Stock prior to December 31, 2020, the holder of the Series A Preferred Stock may require us to redeem any or all of the outstanding shares of Series A Preferred Stock at the issue price of $100 per share plus any accumulated but unpaid dividends thereon to, but not including, the redemption date, subject to adjustments. Any such redemption of our Series A Preferred Stock in cash would reduce the cash that we have available to invest in our business. In the event that we have issued Series A Preferred Stock and redemption is required, there can be no assurance that we will have enough cash at such time to redeem the outstanding shares.

~~Additionally, in~~ evaluating our risks, readers also should carefully consider the risk factors discussed in our Annual Report, ~~on Form 10-K for the year ended December 31, 2016,~~ which could materially affect our business, financial condition, or operating results, in addition to the other information set forth in this report and in our other filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~(a) Sales of Unregistered~~None.

Item 3. Defaults on Senior Securities

~~From July 1, 2017 through September 30, 2017, we consummated the following transactions involving the issuance of unregistered securities:~~None.

the issuance of 118,828 unregistered shares of our common stock in July, August, and September 2017, as payment under the Services Agreement entered into and effective as of November 1, 2015, as amended, by and between us and Third Security as previously discussed in our Current Report on Form 8-K filed on October 30, 2015; November 3, 2016; and December 30, 2016. We issued these shares of common stock in reliance on exemptions from registration under Section 4(a)(2) of the Securities Act.

~~(b) Use of Proceeds~~

On January 27, 2015, we closed a public offering of 4,312,500 shares of our common stock (inclusive of 562,500 shares of common stock sold by us pursuant to the full exercise of an option granted to the underwriters in connection with the offering) at a public offering price of $27.00 per share for aggregate gross offering proceeds of approximately $116.4 million. J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as joint book-running managers. Net proceeds to us were approximately $110.0 million after deducting underwriting discounts and commissions of approximately $6.1 million and other offering expenses of approximately $0.3 million. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates. We invested the funds received in cash equivalents and other short-term and long-term investments in accordance with our investment policy. There has been no material change in the planned use of proceeds from this offering as described in our final prospectus, dated January 21, 2015, and filed with the SEC on January 22, 2015 pursuant to Rule 424(b).

On August 26, 2015, we closed a public offering of 5,609,756 shares of our common stock (inclusive of 731,707 shares of common stock sold by us pursuant to the full exercise of an option granted to the underwriters in connection with the offering) at a public offering price of $41.00 per share for aggregate gross offering proceeds of approximately $230.0 million. JMP Securities LLC acted as sole book-running manager. Stifel, Nicolaus & Company, Incorporated acted as lead manager. Griffin Securities, Inc. and Wunderlich Securities, Inc. acted as co-managers. Net proceeds to us were approximately $218.2 million after deducting underwriting discounts and commissions of approximately $11.5 million and other offering expenses of approximately $0.3 million. No payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates. We invested the funds received in cash equivalents and other short-term and long-term investments in accordance with our investment policy. There has been no material change in the planned use of proceeds from this offering as described in our final prospectus, dated August 21, 2015, and filed with the SEC on August 25, 2015 pursuant to Rule 424(b).

~~(c) Issuer Purchases of Equity Securities~~Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On November 6, 2017, we filed with the State Corporation Commission of the Commonwealth of Virginia, the SCC, Articles of Amendment to our Amended and Restated Articles of Incorporation, or the Amendment, which amended Article III thereof to set the designations of the Series A Preferred Stock to be issued pursuant to the Preferred Stock Facility. The Amendment became effective upon the issuance by the SCC on November 6, 2017, of a certificate of amendment.None.

The Amendment authorizes 1,000,000 shares of Series A Preferred Stock, which are non-voting, accrue dividends of 8 percent per annum and, subject to limited exceptions, are senior to our common stock with respect to the rights to the payment of dividends and on parity with our common stock with respect to the distribution of assets in the event of any liquidation, dissolution or winding up or change of control. The Series A Preferred Stock is also redeemable at our election at any time, or at the election of the holders thereof after December 31, 2020.

The Series A Preferred Stock is convertible into shares of our common stock following the approval of our shareholders, including a majority of the shares voted by shareholders unaffiliated with Mr. Kirk, subject to any regulatory approvals. The conversion price used for the conversion will be the 20-day volume-weighted average market price of our common stock as of market closing on the fifth business day prior to the mailing of the proxy statement soliciting the shareholder approval, subject to adjustment for certain stock splits and similar events. We have agreed to take all reasonable steps necessary to seek

shareholder approval on or before the date of our annual meeting of shareholders in 2019. In addition, prior to conversion, in the event of any voluntary or involuntary liquidation, dissolution or winding up or change of control, the holders of the Series A Preferred Stock will be entitled to participate with the holders of our common stock on a pro rata, as-converted basis, based on a deemed conversion rate of $18.96, which was calculated using the 20-day volume-weighted average market price of our common stock as of market closing on October 13, 2017, subject to adjustment for certain stock splits and similar events.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Amendment and the Amended and Restated Articles of Incorporation, as amended, copies of which are attached hereto as Exhibit 3.2 and Exhibit 3.1, respectively, and incorporated herein by reference.

Item 6. Exhibits



Exhibit No.		Description
3.1*31.1		~~Amended and Restated Articles of Incorporation~~ ~~(incorporated by reference to Exhibit 3.1 to Intrexon Corporation's Current Report on Form 8-K filed on August 15, 2013 with the Securities and Exchange Commission).~~

3.2**	~~Articles of Amendment to the Amended and Restated Articles of Incorporation.~~

~~10.1*†~~	~~Amendment to the Intrexon Corporation 2013 Amended and Restated Omnibus Incentive Plan, effective as of June 28, 2017~~ ~~(incorporated by reference to Exhibit 10.1 to Intrexon Corporation's Current Report on Form 8-K filed on June 30, 2017 with the Securities and Exchange Commission).~~

10.2*	~~Preferred Stock Equity Facility Agreement, dated October 16, 2017, by and between Kapital Joe, LLC and Intrexon Corporation~~ ~~(incorporated by reference to Exhibit 10.1 to Intrexon Corporation's Current Report on Form 8-K filed on October 16, 2017 with the Securities and Exchange Commission).~~

~~31.1~~	Certification of ~~Randal J. Kirk, Chairman and~~Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of ~~Intrexon Corporation,~~the Company, 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.

31.2		Certification of ~~Rick L. Sterling, Chief Financial Officer (Principal~~D. Bradford Osborne, Vice President, Finance & Accounting (Interim Principal Financial Officer) of ~~Intrexon Corporation,~~the Company, 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.

32.1**		Certification of ~~Randal J. Kirk, Chairman and~~Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of ~~Intrexon Corporation,~~the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of ~~Rick L. Sterling, Chief Financial Officer (Principal~~D. Bradford Osborne, Vice President, Finance & Accounting (Interim Principal Financial Officer) of ~~Intrexon Corporation,~~the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~101.0~~101**		Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended ~~September 30, 2017,~~March 31, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language)). Attached as Exhibit 101.0 to this Quarterly Report on Form 10-Q are the following documents formatted in XBRL: (i) the Condensed Consolidated Balance Sheets ~~at September 30, 2017~~as of March 31, 2021 and December 31, ~~2016,~~2020, (ii) the Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, (iii) the Condensed Consolidated Statements of Comprehensive Loss for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, (iv) the Condensed Consolidated Statements of Shareholders' ~~and Total~~ Equity for the ~~nine~~three months ended ~~September~~March 31, ~~2017,~~2021 and 2020, (v) the Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, and (vi) the Notes to the Condensed Consolidated Financial Statements.

* Previously filed.


104***			~~Furnished herewith.~~			Cover Page Interactive Data File (embedded within the Inline XBRL document).


†	~~Indicates management contract or compensatory plan.~~

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~Intrexon Corporation~~Precigen, Inc.

(Registrant)

Date: ~~November 9, 2017~~May 10, 2021

By:

/s/ ~~Rick L. Sterling~~D. BRADFORD OSBORNE

~~Rick L. Sterling~~D. Bradford Osborne

~~Chief Financial Officer~~Vice President, Finance & Accounting

(Interim Principal Financial and Accounting Officer)


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
(Amounts in thousands)	2017			2016			2017			2016			(Amounts in thousands)	2021		2020
Net loss	$	(40,836	)	$	(30,011	)	$	(92,875	)	$	(145,362	)	Net loss	$	(17,318)	$	(55,998)
Other comprehensive income (loss):													Other comprehensive income (loss):
Unrealized gain (loss) on investments	79			(151		)	74			588			Unrealized gain (loss) on investments	(48)		572
Gain (loss) on foreign currency translation adjustments	7,410			(3,495		)	19,405			(13,167		)
Loss on foreign currency translation adjustments													Loss on foreign currency translation adjustments	(2,203)		(1,415)
Release of cumulative foreign currency translation adjustments to loss from discontinued operations													Release of cumulative foreign currency translation adjustments to loss from discontinued operations	0		26,957
Comprehensive loss	(33,347		)	(33,657		)	(73,396		)	(157,941		)	Comprehensive loss	$	(19,569)	$	(29,884)
Comprehensive loss attributable to the noncontrolling interests	1,129			1,024			3,096			2,916
Comprehensive loss attributable to Intrexon	$	(32,218	)	$	(32,633	)	$	(70,300	)	$	(155,025	)


	September 30, 2017			December 31, 2016				March 31, 2021		December 31, 2020
Land and land improvements	$	11,642		$	10,904		Land and land improvements	$	9,844	$	9,844
Buildings and building improvements	15,216			8,123			Buildings and building improvements	12,088		12,088
Furniture and fixtures	2,220			2,176			Furniture and fixtures	1,224		1,228
Equipment	58,851			44,392			Equipment	31,537		31,150
Leasehold improvements	22,974			15,105			Leasehold improvements	6,260		6,260
Breeding stock	3,822			3,893			Breeding stock	912		868
Computer hardware and software	9,817			6,844			Computer hardware and software	5,710		5,684
Trees	5,719			2,772
Construction and other assets in progress	15,138			4,513			Construction and other assets in progress	2,530		2,754
	145,399			98,722				70,105		69,876
Less: Accumulated depreciation and amortization	(42,523		)	(34,050		)	Less: Accumulated depreciation and amortization	(36,389)		(34,952)
Property, plant and equipment, net	$	102,876		$	64,672		Property, plant and equipment, net	$	33,716	$	34,924


	Weighted Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net			Gross Carrying Amount		Accumulated Amortization		Net
Patents, developed technologies and know-how	15.7	$	266,697	$	(43,465	)	$	223,232	Patents, developed technologies and know-how	$	93,691	$	(34,946)	$	58,745
Customer relationships	6.5	10,700		(6,033		)	4,667		Customer relationships	10,850		(9,568)		1,282
Trademarks	9.3	6,800		(2,373		)	4,427		Trademarks	5,900		(4,697)		1,203
In-process research and development		8,571		—			8,571
Total		$	292,768	$	(51,871	)	$	240,897	Total	$	110,441	$	(49,211)	$	61,230



x ☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Item No.		Page
PART I - FINANCIAL INFORMATION
1.	Condensed Consolidated Financial Statements (unaudited):	4
	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	4
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	6
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020	7
	Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2021 and 2020	8
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	9
	Notes to the Condensed Consolidated Financial Statements	11
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	34
3.	Quantitative and Qualitative Disclosures About Market Risk	48
4.	Controls and Procedures	48

PART II - OTHER INFORMATION
1.	Legal Proceedings	49
1A.	Risk Factors	49
2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
3.	Defaults on Senior Securities	49
4.	Mine Safety Disclosures	49
5.	Other Information	49
6.	Exhibits	50
	Signatures	51



	September 30, 2017		December 31, 2016
Current assets	$	68,021	$	77,761
Non-current assets	12,856		11,040
Total assets	80,877		88,801
Current liabilities	9,032		11,588
Non-current liabilities	2,400		—
Total liabilities	11,432		11,588
Net assets	$	69,445	$	77,213



Common shares	$	15,616
Warrants	1,381
Contingent consideration	585
	$	17,582



Cash and cash equivalents	$	2,054
Short term investments	542
Trade receivables	75
Other receivables	97
Prepaid expenses and other	227
Property and equipment	250
Intangible assets	14,000
Other non-current assets	58
Total assets acquired	17,303
Accounts payable	2,158
Accrued compensation and benefits	1,226
Other accrued expenses	856
Other long term liabilities	92
Deferred tax liabilities	239
Total liabilities assumed	4,571
Net assets acquired	12,732
Goodwill	4,850
Total consideration	$	17,582



	Three Months Ended September 30, 2017
	Revenue Recognized From				Total
	Upfront and Milestone Payments		Research and Development Services		Total
ZIOPHARM Oncology, Inc.	$	4,843	$	5,530	$	10,373
Oragenics, Inc.	262		213		475
Fibrocell Science, Inc.	604		1,079		1,683
Genopaver, LLC	68		1,354		1,422
S & I Ophthalmic, LLC	—		376		376
OvaXon, LLC	—		262		262
Intrexon Energy Partners, LLC	625		1,278		1,903
Persea Bio, LLC	125		141		266
Ares Trading S.A.	1,597		759		2,356
Intrexon Energy Partners II, LLC	500		316		816
Intrexon T1D Partners, LLC	287		1,175		1,462
Harvest start-up entities (1)	616		3,404		4,020
Other	979		1,762		2,741
Total	$	10,506	$	17,649	$	28,155



	Three Months Ended September 30, 2016
	Revenue Recognized From				Total
	Upfront and Milestone Payments		Research and Development Services		Total
ZIOPHARM Oncology, Inc.	$	4,843	$	5,586	$	10,429
Oragenics, Inc.	262		294		556
Fibrocell Science, Inc.	604		563		1,167
Genopaver, LLC	68		1,625		1,693
S & I Ophthalmic, LLC	—		2,782		2,782
OvaXon, LLC	—		709		709
Intrexon Energy Partners, LLC	625		4,230		4,855
Persea Bio, LLC	125		208		333
Ares Trading S.A.	1,597		719		2,316
Intrexon Energy Partners II, LLC	500		372		872
Intrexon T1D Partners, LLC	276		511		787
Harvest start-up entities (1)	425		868		1,293
Other	895		1,903		2,798
Total	$	10,220	$	20,370	$	30,590



	Nine Months Ended September 30, 2017
	Revenue Recognized From				Total
	Upfront and Milestone Payments		Research and Development Services		Total
ZIOPHARM Oncology, Inc.	$	14,527	$	16,795	$	31,322
Oragenics, Inc.	786		733		1,519
Fibrocell Science, Inc.	1,814		3,561		5,375
Genopaver, LLC	205		4,410		4,615
S & I Ophthalmic, LLC	—		751		751
OvaXon, LLC	—		1,966		1,966
Intrexon Energy Partners, LLC	1,875		7,034		8,909
Persea Bio, LLC	375		446		821
Ares Trading S.A.	4,791		3,683		8,474
Intrexon Energy Partners II, LLC	1,500		1,421		2,921
Intrexon T1D Partners, LLC	823		3,059		3,882
Harvest start-up entities (1)	1,823		10,012		11,835
Other	3,735		3,259		6,994
Total	$	32,254	$	57,130	$	89,384



	Nine Months Ended September 30, 2016
	Revenue Recognized From				Total
	Upfront and Milestone Payments		Research and Development Services		Total
ZIOPHARM Oncology, Inc.	$	6,687	$	17,693	$	24,380
Oragenics, Inc.	786		1,083		1,869
Fibrocell Science, Inc.	1,814		2,604		4,418
Genopaver, LLC	205		4,703		4,908
S & I Ophthalmic, LLC	—		6,326		6,326
OvaXon, LLC	—		2,211		2,211
Intrexon Energy Partners, LLC	1,875		11,180		13,055
Persea Bio, LLC	375		613		988
Ares Trading S.A.	4,791		2,148		6,939
Intrexon Energy Partners II, LLC	1,500		816		2,316
Intrexon T1D Partners, LLC	554		543		1,097
Harvest start-up entities (1)	776		1,890		2,666
Other	4,684		6,287		10,971
Total	$	24,047	$	58,097	$	82,144



	Nine Months Ended September 30, 2017
Beginning balance	$	129,545
Purchase of preferred stock	766
Dividend income from investments in preferred stock	12,303
Unrealized appreciation in the fair value of the investments in preferred stock	5,885
Ending balance	$	148,499



	Nine Months Ended September 30, 2017
Beginning balance	$	2,081
Acquisition date fair value of contingent consideration liability (Note 3)	585
Change in fair value of contingent consideration recognized in selling, general and administrative expenses	245
Ending balance	$	2,911



Balance at December 31, 2016	$	157,175
Acquisitions	4,850
Foreign currency translation adjustments	4,796
Balance at September 30, 2017	$	166,821



2017	$	107
2018	462
2019	400
2020	371
2021	834
2022	360
Thereafter	3,470
Total	$	6,004



	September 30, 2017			December 31, 2016
Unrealized loss on investments	$	(15	)	$	(89	)
Loss on foreign currency translation adjustments	(16,735		)	(36,113		)
Total accumulated other comprehensive loss	$	(16,750	)	$	(36,202	)



2017	$	1,252
2018	8,083
2019	8,042
2020	8,063
2021	7,132
2022	6,085
Thereafter	25,695
Total	$	64,352



	September 30,
	2017	2016
Options	12,641,770	12,103,407
Warrants	133,264	30,191
Total	12,775,034	12,133,598