Share-Based Payments

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

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


	Year Ended December 31,
	2020		2019		2018
Cost of products	$	10	$	20	$	78
Cost of services	134		220		237
Research and development	1,815		3,478		5,017
Selling, general and administrative	17,787		11,380		25,222
Discontinued operations	(1,380)		3,852		5,742
Total	$	18,366	$	18,950	$	36,296

Precigen Stock Option Plans

In April 2008, Precigen adopted the 2008 Equity Incentive Plan (the "2008 Plan") for employees and nonemployees pursuant to which Precigen's board of directors granted share based awards, including stock options, to officers, key employees and nonemployees. Upon the effectiveness of the 2013 Omnibus Incentive Plan (the "2013 Plan"), no new awards may be granted under the 2008 Plan. As of December 31, 2020, there were 185,078 stock options outstanding under the 2008 Plan.

Precigen adopted the 2013 Plan for employees and nonemployees pursuant to which Precigen's board of directors may grant share-based awards, including stock options, and shares of common stock, to employees, officers, consultants, advisors, and nonemployee directors. The 2013 Plan became effective in August 2013, and as of December 31, 2020, there were 27,000,000 shares authorized for issuance under the 2013 Plan, of which 10,225,570 stock options and 1,176,629 RSUs were outstanding and 7,055,010 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 December 31, 2020, there were 5,000,000 shares authorized for issuance under the 2019 Plan, of which 845,248 stock options and 551,083 RSUs were outstanding and 2,432,624 shares were available for grant.

Stock options may be granted with an exercise price equal to or greater than the stock's fair market value at the date of grant. Stock options may be granted with an exercise price less than the stock's fair market value at the date of grant if the stock options are replacement options in accordance with certain United States Treasury regulations. Virtually all stock options have ten-year terms and vest four years from the date of grant.

Stock option activity was as follows:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2017	11,382,747	$	28.99	7.32
Granted	1,470,339	14.26
Exercised	(45,159)	(6.59)
Forfeited	(929,596)	(21.48)
Expired	(785,268)	(26.25)
Balances at December 31, 2018	11,093,063	27.95		6.81
Granted	1,556,575	6.52
Exercised	(19,887)	(3.17)
Forfeited	(1,236,326)	(24.92)
Expired	(2,371,143)	(38.53)
Balances at December 31, 2019	9,022,282	21.94		6.10
Granted	5,693,498	10.03
Exercised	(30,061)	(3.88)
Forfeited	(976,324)	(15.47)
Expired	(2,453,499)	(26.53)
Balances at December 31, 2020	11,255,896	15.53		7.25
Exercisable at December 31, 2020	5,437,667	19.61		5.61

Total unrecognized compensation costs related to unvested awards as of December 31, 2020 were $13,842, and are expected to be recognized over a weighted-average period of approximately 2.75 years.

The weighted average grant date fair value of options granted during 2020, 2019 and 2018 was $2.98, $3.79 and $7.94, respectively. The aggregate intrinsic value of options exercised during 2020, 2019 and 2018 was $51, $66 and $356, respectively. The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of Precigen's common stock for those shares where the exercise price was lower than the fair value of Precigen's common stock on the date of exercise.

The following table summarizes additional information about stock options outstanding as of December 31, 2020:


					Options Outstanding						Options Exercisable
Range of Exercise Prices					Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value		Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value
$	1.55	—	$	5.95	3,259,685	$	4.63	8.92	$	18,157	1,271,310	$	3.11	8.73	$	9,018
$	6.06	—	$	15.09	2,261,216	11.01		8.23	1,325		345,788	9.09		4.76	689
$	15.80	—	$	20.94	3,028,309	18.85		7.38	—		1,216,258	19.82		5.62	—
$	21.13	—	$	36.84	2,303,371	26.33		4.32	—		2,200,996	26.52		4.22	—
$	37.88	—	$	47.35	403,315	42.26		4.01	—		403,315	42.26		4.01	—
					11,255,896	$	15.53	7.25	$	19,482	5,437,667	$	19.61	5.61	$	9,707

The following table summarizes additional information about stock options outstanding as of December 31, 2019:


					Options Outstanding						Options Exercisable
Range of Exercise Prices					Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value		Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Aggregate Intrinsic Value
$	3.17	—	$	8.60	1,612,219	$	6.40	8.08	$	473	585,144	$	5.61	5.95	$	194
$	8.77	—	$	20.68	1,278,121	15.55		6.53	—		753,064	15.89		5.20	—
$	20.94				1,646,500	20.94		6.51	—		892,000	20.94		6.02	—
$	21.00	—	$	29.47	1,976,645	23.71		6.06	—		1,585,940	23.71		5.79	—
$	29.56	—	$	65.08	2,508,797	34.46		4.38	—		2,448,046	34.47		4.33	—
					9,022,282	$	21.94	6.10	$	473	6,264,194	$	24.89	5.20	$	194

RSU activity was as follows:


	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2017	—	$	—	0.00
Granted	1,069,126	13.84
Vested	(25,000)	(15.82)
Forfeited	(73,785)	(13.47)
Balances at December 31, 2018	970,341	13.82		1.43
Granted	2,278,460	6.59
Vested	(1,159,165)	(8.74)
Forfeited	(307,654)	(8.99)
Balances at December 31, 2019	1,781,982	8.71		1.24
Granted	3,157,390	3.09
Vested	(2,802,593)	(3.99)
Forfeited	(409,067)	(8.59)
Balances at December 31, 2020	1,727,712	6.11		0.42

Total unrecognized compensation costs related to unvested RSU awards as of December 31, 2020 were $4,188 and are expected to be recognized over a weighted-average period of approximately 0.75 years.

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

The Company's Executive Chairman ("Executive Chairman"), who previously served as the Company's Chief Executive Officer ("CEO") until January 1, 2020, and as an employee and executive officer until September 24, 2020, received a base salary of $200 per month through March 31, 2020, payable in fully-vested shares of Precigen common stock with such shares subject to a three-year lock-up on resale. The monthly number of shares of common stock was calculated based on the closing price on the last trading day of each month through March 2019 and based on the volume weighted average of the price of Precigen common stock over the 30 day period ending on the last calendar day of each month thereafter, and the shares were issued pursuant to the terms of a Restricted Stock Unit Agreement ("RSU Agreement") between Precigen and the Executive Chairman pursuant to the terms of the 2013 Plan. The RSU Agreement expired March 31, 2020. The fair value of the shares issued as compensation for services is included in selling, general, and administrative expenses in the Company's consolidated statements of operations and totaled $454, $1,868, and $1,956 for the years ended December 31, 2020, 2019 and 2018, respectively.

In September 2020, the Company's board of directors, upon the recommendation of the compensation committee of the board, approved a new compensation arrangement for the Executive Chairman. The new arrangement consists of (i) an annual retainer of $100 payable in cash or, at the Executive Chairman's election, shares of Precigen common stock; (ii) an annual grant of fully

vested stock options having a grant date fair value of $250; and (iii) an annual grant of RSUs having a grant date fair value of $250. The compensation arrangement begins in calendar year 2021, and the foregoing elements were prorated for the nine months of 2020 not covered by the Executive Chairman's previous compensation arrangement discussed above. The terms of the equity awards granted to the Executive Chairman are pursuant to the 2019 Plan.