Segments | Segments In April 2019, the Company initiated efforts to better deploy resources, realize inherent synergies, and position the Company for growth with a core focus on healthcare and initiated plans to achieve this through various corporate activities ultimately resulting in the closing of the Transactions in January 2020 (Note 3). Beginning in the second quarter of 2019, the Company's CODM assessed the operating performance of and allocated resources for several operating segments using Segment Adjusted EBITDA. Management believes this financial metric is a key indicator of operating results since it excludes noncash revenues and expenses that are not reflective of the underlying business performance of an individual enterprise. The Company defines Segment Adjusted EBITDA as net loss before (i) interest expense, (ii) income tax expense or benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) adjustments for bonuses paid in equity awards, (vi) loss on impairment of goodwill and other long-lived assets, (vii) equity in net loss of affiliates, and (viii) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates. For the six months ended June 30, 2020, the Company modified the current period definition of Segment Adjusted EBITDA to exclude adjustments recorded to reverse the difference of bonuses accrued as of December 31, 2019 compared to the value of equity awards granted, as the Company determined in March 2020 that those accrued bonuses would be paid through the grant of equity awards instead of cash. Segment Adjusted EBITDA for the three and six months ended June 30, 2019 was not impacted by this change. Because the Company uses Segment Adjusted EBITDA as its primary measure of segment performance, it has included this measure in its discussion of segment operating results. The Company has also disclosed revenues from external customers and intersegment revenues for each reportable segment. Corporate expenses are not allocated to the segments and are managed at a consolidated level. The CODM does not use total assets by segment to evaluate segment performance or allocate resources, and accordingly, these amounts are not required to be disclosed. The Company's CODM now regularly reviews disaggregated financial information for each of the Company's operating segments. The Company's segment presentation excludes consideration of all of the businesses included in the Transactions (Note 3). For the three and six months ended June 30, 2020, the Company's reportable segments were (i) PGEN Therapeutics, (ii) ActoBio, (iii) MBP Titan, (iv) Trans Ova, and (v) the Human Biotherapeutics division. These identified reportable segments met the quantitative thresholds to be reported separately for the six months ended June 30, 2020. See Note 1 for a description of PGEN Therapeutics, ActoBio, MBP Titan, and Trans Ova. The Company's Human Biotherapeutics division is an operating division within Precigen which includes the Company's majority-owned subsidiary, Triple-Gene LLC, and its collaborations with Fibrocell (Note 5). The All Other category as reported below reflects Precigen's other operating segments that do not meet the quantitative thresholds to be reported separately. The Company has also recast 2019 segment information on the same basis as the current presentation. Information by reportable segment was as follows: Three Months Ended June 30, 2020 PGEN Therapeutics ActoBio MBP Titan Trans Ova Human Biotherapeutics All Other Total Revenues from external customers $ 218 $ 32 $ — $ 23,845 $ 4,210 $ 2,105 $ 30,410 Intersegment revenues 1,612 (3) — 90 — — 1,699 Total segment revenues $ 1,830 $ 29 $ — $ 23,935 $ 4,210 $ 2,105 $ 32,109 Segment Adjusted EBITDA $ (5,698) $ (1,135) $ (5,199) $ 6,528 $ (495) $ 637 $ (5,362) Three Months Ended June 30, 2019 PGEN Therapeutics ActoBio MBP Titan Trans Ova Human Biotherapeutics All Other Total Revenues from external customers $ 549 $ 181 $ 1,215 $ 24,392 $ 2,462 $ 3,998 $ 32,797 Intersegment revenues 2,412 52 2 674 — 60 3,200 Total segment revenues $ 2,961 $ 233 $ 1,217 $ 25,066 $ 2,462 $ 4,058 $ 35,997 Segment Adjusted EBITDA $ (7,467) $ (4,124) $ (9,188) $ 4,932 $ (354) $ (2,479) $ (18,680) Six Months Ended June 30, 2020 PGEN Therapeutics ActoBio MBP Titan Trans Ova Human Biotherapeutics All Other Total Revenues from external customers $ 378 $ 230 $ — $ 40,630 $ 14,573 $ 4,397 $ 60,208 Intersegment revenues 3,715 (3) 7 199 — 281 4,199 Total segment revenues $ 4,093 $ 227 $ 7 $ 40,829 $ 14,573 $ 4,678 $ 64,407 Segment Adjusted EBITDA $ (12,617) $ (3,125) $ (13,963) $ 5,329 $ (1,833) $ 1,129 $ (25,080) Six Months Ended June 30, 2019 PGEN Therapeutics ActoBio MBP Titan Trans Ova Human Biotherapeutics All Other Total Revenues from external customers $ 1,730 $ 582 $ 2,696 $ 39,326 $ 2,845 $ 8,095 $ 55,274 Intersegment revenues 4,777 495 2 947 — 73 6,294 Total segment revenues $ 6,507 $ 1,077 $ 2,698 $ 40,273 $ 2,845 $ 8,168 $ 61,568 Segment Adjusted EBITDA $ (14,836) $ (6,562) $ (17,214) $ 2,706 $ (577) $ (3,717) $ (40,200) The table below reconciles total segment revenues from reportable segments to total consolidated revenues: Three Months Ended Six Months Ended 2020 2019 2020 2019 Total segment revenues from reportable segments $ 30,004 $ 31,939 $ 59,729 $ 53,400 Other revenues, including from other operating segments 2,526 4,097 5,740 8,315 Elimination of intersegment revenues (2,106) (3,200) (5,207) (6,294) Total consolidated revenues $ 30,424 $ 32,836 $ 60,262 $ 55,421 The table below reconciles Segment Adjusted EBITDA for reportable segments to consolidated net loss from continuing operations before income taxes: Three Months Ended Six Months Ended 2020 2019 2020 2019 Segment Adjusted EBITDA for reportable segments $ (5,999) $ (16,201) $ (26,209) $ (36,483) All Other Segment Adjusted EBITDA 637 (2,479) 1,129 (3,717) Remove cash paid for capital expenditures and investments in affiliates 1,879 4,155 4,620 7,667 Add recognition of previously deferred revenue associated with upfront and milestone payments 5,573 6,247 18,046 10,859 Other expenses: Interest expense (4,592) (4,353) (9,184) (8,658) Depreciation and amortization (4,783) (4,863) (9,593) (10,207) Impairment losses (22,041) — (22,041) — Stock-based compensation expense (4,897) 484 (10,615) (7,764) Adjustment related to bonuses paid in equity awards — — 2,833 — Equity in net loss of affiliates (251) (716) (602) (1,464) Other 3 — 12 — Unallocated corporate costs (7,344) (11,426) (17,526) (29,448) Eliminations (1,659) (3,162) (4,246) (6,012) Consolidated net loss from continuing operations before income taxes $ (43,474) $ (32,314) $ (73,376) $ (85,227) As of June 30, 2020 and December 31, 2019, the Company had $5,997 and $6,724, respectively, of long-lived assets in foreign countries from continuing operations. The Company recognized revenues from continuing operations derived in foreign countries totaling $122 and $233 for the three months ended June 30, 2020 and 2019, respectively, and $363 and $765 for the six months ended June 30, 2020 and 2019, respectively. |