Discontinued Operations | Discontinued Operations Where applicable, the notes to the accompanying condensed consolidated financial statements have been updated to reflect information pertaining to the Company's continuing operations based on the discontinued operations summarized below. Trans Ova As part of the Company's strategic shift to becoming a primarily healthcare company, as discussed in Note 1, on August 18, 2022, the Company completed the previously announced sale of 100% of the issued and outstanding membership interests in its wholly-owned subsidiary,Trans Ova, to Spring Bidco LLC, a Delaware limited liability company for $170,000 and up to $10,000 in cash earn-out payments contingent upon the performance of Trans Ova in 2022 and 2023 (the “Transaction”). The Company received $162,306 in proceeds, net of certain transaction costs, on August 18, 2022, after giving effect to the preliminary closing purchase price adjustments. The final working capital adjustment of approximately $1,000 is expected to be received in the fourth quarter of 2022. The Company elected to account for the contingent consideration arrangement as a gain contingency in accordance with ASC 450, Contingencies (Subtopic 450-30). Under this approach, the Company recognizes the contingent consideration receivable in earnings after the contingency is resolved. Accordingly, to determine the initial gain on the sale of Trans Ova, the Company did not include an amount related to the contingent consideration arrangement as part of the consideration received. In connection with the Transaction, the Company, as of September 30, 2022, holds a total of $82,443, in a segregated account to be used for certain permitted purposes, including resolution of the Company’s outstanding convertible notes as discussed further in Note 11. In addition, the Company is required to indemnify the Buyer for certain expenses incurred post close (related to covenants and certain additional specified liabilities including certain patent infringement lawsuits), if incurred, in amounts not to exceed $5,750, which was recorded as a reduction of the gain on divestiture in the three and nine months ended September 30, 2022, and is included in other accrued liabilities as of September 30, 2022. To date, the Company has not received an indemnification claim. The carrying values of the major classes of assets and liabilities included in assets and liabilities held for sale related to Trans Ova as of December 31, 2021, are as follows: December 31, Assets Cash and cash equivalents $ 6,497 Trade receivables, net 19,491 Inventory 12,935 Other current assets 1,265 Property, plant and equipment, net 25,716 Intangible assets, net 1,824 Goodwill 16,594 Right-of-use assets 910 Other noncurrent assets 252 Total assets held for sale $ 85,484 Liabilities Accounts payable $ 2,293 Accrued compensation and benefits 3,367 Other accrued liabilities 3,778 Deferred revenue 2,952 Current portion of long-term debt 350 Other current liabilities 111 Long-term debt, net of current portion 2,867 Other long-term liabilities 805 Total liabilities held for sale $ 16,523 The following table presents the financial results of discontinued operations related to Trans Ova for the three and nine months ended September 30, 2022 and 2021: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Product revenues $ 4,322 $ 6,743 $ 21,494 $ 20,153 Service revenues 7,880 11,485 49,657 48,916 Total revenues 12,202 18,228 71,151 69,069 Cost of products 4,163 7,010 18,634 17,895 Cost of services 4,352 6,988 22,701 21,400 Research and development 481 486 2,348 1,367 Selling, general and administrative 3,204 7,683 15,215 17,162 Total operating expenses 12,200 22,167 58,898 57,824 Operating income (loss) 2 (3,939) 12,253 11,245 Other income, net 319 434 1,139 1,133 Gain on divestiture 94,702 — 94,702 — Income (loss) before income taxes 95,023 (3,505) 108,094 12,378 Income tax (expense) benefit — — — — Income (loss) from discontinued operations $ 95,023 $ (3,505) $ 108,094 $ 12,378 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 Trans Ova that are included in the accompanying condensed consolidated statements of cash flows: Nine Months Ended 2022 2021 Adjustments to reconcile net income to net cash used in operating activities Depreciation and amortization $ 3,574 $ 4,268 Loss on disposal of assets 421 547 Stock-based compensation expense 9 272 Provision for credit losses 944 1,035 Cash flows from investing activities Purchases of property, plant and equipment (3,529) (2,731) Proceeds from sale of assets 594 1,425 MBP Titan As a result of market uncertainty driven by the COVID-19 pandemic and the state of the energy sector raising significant challenges for the strategic alternatives pursued by MBP Titan, beginning in the second quarter of 2020 and throughout the remainder of 2020, the Company suspended MBP Titan's operations, preserved certain of MBP Titan's intellectual property, terminated all of its personnel, and undertook steps to dispose of its other assets and obligations. The wind down of MBP Titan's activities was substantially completed 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 to becoming a primarily healthcare company advancing technologies and products that address complex healthcare challenges that the Company commenced in 2020. The assets, liabilities, and expenses related to the discontinued operations of MBP Titan are presented as discontinued operations in the accompanying condensed consolidated financial statements for all periods. The January 2021 sale of property and equipment resulted in a gain on disposal of assets of $464, which is included in income from discontinued operations in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 2021. In January 2021, the Company executed termination and recapture agreements with the landlord of the leased facility used in MBP Titan's operations, thereby relieving the Company of all of its obligations related to the facility that were originally due to expire in July 2025. This lease termination resulted in a gain of $4,602, which is also included in income from discontinued operations in the accompanying condensed consolidated statement of operations for the nine months ended September 30, 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 which was recognized as revenue in the third quarter of 2022 upon acquiring control of these entities (See Notes 2, 4, 5 and 16), 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. There were no discontinued operations related to MBP Titan for the three and nine months ended September 30, 2022. The following table presents the financial results of discontinued operations related to MBP Titan for the three and nine months ended September 30, 2021: Three Months Ended Nine Months Ended 2021 2021 Operating gain 60 4,599 Operating gain 60 4,599 Gain from discontinued operations $ 60 $ 4,599 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 for the nine months ended September 30, 2021 that are included in the accompanying condensed consolidated statements of cash flows. Nine Months Ended 2021 Adjustments to reconcile net loss to net cash used in operating activities Gain on disposals of assets $ (464) Noncash gain on termination of leases (4,602) Cash flows from investing activities Proceeds from sales of assets 1,083 |