Consolidated Majority-Owned Subsidiaries

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Consolidated Majority-Owned Subsidiaries

Consolidated Majority-Owned Subsidiaries

AquaBounty

On November 16, 2012, the Company acquired 48,631,444 shares of AquaBounty common stock, representing 47.56% of the then outstanding shares of AquaBounty, for $6,000 through a definitive purchase agreement with an existing AquaBounty shareholder and its affiliate. On November 29, 2012, the Company executed a promissory note purchase agreement (“promissory note”) with AquaBounty. The promissory note allowed for the Company to loan up to $500 to AquaBounty. Draws on the promissory note by AquaBounty accrued annual interest of 3% and matured no later than May 28, 2013. Between December 2012 and February 2013, AquaBounty drew $500 on the promissory note. On March 15, 2013, AquaBounty repaid the $500 promissory note plus accrued interest.

On March 15, 2013, the Company acquired 18,714,814 shares of AquaBounty for $4,907 in a private subscription offering, thereby increasing the Company’s ownership in AquaBounty to 53.82%, resulting in the Company consolidating AquaBounty pursuant to the step acquisition guidance in ASC 805. The Company recognized a gain of $7,415 to account for the difference between the carrying value and the fair value of the previously held 47.56% equity interest. The fair value of the consideration transferred included:

Consideration paid	$	4,907
Fair value of noncontrolling interest	15,153
Fair value of the Company’s investment in affiliate held before the business combination	12,751
Fair value of the consideration transferred	$	32,811

The Company used the private subscription price to measure fair value of the Company’s previously held investment and noncontrolling interest. The estimated fair value of assets acquired and liabilities assumed at the acquisition date is shown in the table below along with subsequent adjustments during the measurement period to the fair value of assets acquired and liabilities assumed. The adjustments arose from differences between the initial and final valuations of intangible assets and long-term debt.

	Initial estimated fair value		Adjustments			Adjusted fair value
Cash	$	5,419	$	—		$	5,419
Short-term investments	14		—			14
Trade receivables	4		—			4
Other receivables	9		—			9
Prepaid expenses and other	200		—			200
Property, plant and equipment	1,241		—			1,241
Intangible assets	14,900		—			14,900
Other assets	22		—			22
Total assets acquired	21,809		—			21,809
Accounts payable	156		—			156
Accrued compensation	94		—			94
Other accrued liabilities	395		—			395
Long term debt	2,199		(845		)	1,354
Total liabilities assumed	2,844		(845		)	1,999
Net assets acquired	18,965		845			19,810
Goodwill	13,846		(845		)	13,001
Total consideration	$	32,811	$	—		$	32,811

The fair value of acquired intangible assets was determined using the multi-period excess earnings method. The acquired intangible assets consist of in-process research and development until regulatory approval is obtained, at which point the intangible assets will be accounted for as definite-lived intangible assets and amortized over the expected useful life of fifteen years. The goodwill represents future revenue opportunities and the potential for expansion of AquaBounty products and is not expected to be deductible for tax purposes.

The results of operations of AquaBounty are included in the consolidated statements of operations beginning on the acquisition date. The following unaudited condensed pro forma financial information for the nine months ended September 30, 2013 is presented as if the acquisition had been consummated on January 1, 2012:

	Nine Months Ended   September 30, 2013
	Pro forma
Revenues	$	16,617
Net loss	(35,742		)
Net loss attributable to noncontrolling interest	1,496
Net loss attributable to Intrexon	(34,246		)
Accretion of dividends on redeemable convertible preferred stock	(18,391		)
Net loss attributable to Intrexon common shareholders	$	(52,637	)

The pro forma net loss for the nine months ended September 30, 2013 excludes the $7,415 non-recurring gain on remeasurement of the Company’s previously held investment in AquaBounty.

On March 20, 2014, the Company acquired 19,040,366 additional shares of AquaBounty common stock for $10,000 in a private subscription offering, thereby increasing the Company’s aggregate ownership in AquaBounty to 59.85% upon closing.

See Note 6 for a discussion of the Company’s ECC with AquaBounty.

BioPop

On October 1, 2013, the Company paid $1,300 to acquire 51% of the outstanding common stock of BioPop, and effective on that date, the Company began consolidating BioPop in its consolidated results of operations and financial position pursuant to ASC 805, Business Combinations (“ASC 805”). In connection with the transaction, the Company recorded goodwill of $822 and intangible assets of $430. The intangible assets consist of acquired technology and are being amortized over the expected useful life of four years.