Commitments and Contingencies

Operating Leases

The Company leases certain facilities and equipment under noncancelable operating leases. The equipment leases are renewable at the option of the Company. At September 30, 2016, future minimum lease payments under operating leases having initial or remaining noncancelable lease terms in excess of one year are as follows:



2016	$	705
2017	6,362
2018	5,695
2019	5,434
2020	5,487
2021	4,888
Thereafter	20,179
Total	$	48,750

Rent expense, including other facility expenses, was $2,075 and $2,167 for the three months ended September 30, 2016 and 2015, respectively, and $6,410 and $6,548 for the nine months ended September 30, 2016 and 2015, respectively.

The Company maintains subleases for certain of its facilities. Rental income under sublease agreements was $184 and $334 for the three months ended September 30, 2016 and 2015, respectively, and $854 and $1,153 for the nine months ended September 30, 2016 and 2015, respectively. Future rental income is expected to be $9 for 2016 and $36 for 2017.

Contingencies

In March 2012, Trans Ova was named as a defendant in a licensing and patent infringement suit brought by XY, LLC ("XY") alleging that certain of Trans Ova's activities breach a licensing agreement and infringe on patents that XY allegedly owns. Trans Ova filed a number of counterclaims in the case. The matter proceeded to a jury trial in January 2016, and in February 2016, the jury determined that XY and Trans Ova had each breached the licensing agreement and that Trans Ova had infringed the intellectual property of XY. In April 2016, the court issued its order, entering a jury award of damages to Trans Ova in the amount of $528 and a jury award of damages to XY in the amount of $6,066, each with prejudgment interest. The order provides for the continuation of Trans Ova's license to XY's technology, subject to an ongoing royalty for Trans Ova which is subject to a post-judgment motion, including XY's motion for enhanced damages, and potential appeals therefrom. Since the inception of the license, Trans Ova has remitted payments to XY pursuant to the terms of the original license agreement and has recorded these payments in cost of services in the consolidated statements of operations for the respective periods. For the period from inception of the agreement through the court's order, aggregate royalty and license payments were $3,170, 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, 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, 2016, this amount is included in restricted cash on the accompanying consolidated balance sheet. The Company and Trans Ova believe they have compelling grounds to overturn the adverse rulings of the order through appellate actions and that, as a result, the amount of damages could be reduced or eliminated. No assurances can be given, however, that such matters will ultimately be ruled in Trans Ova's favor, and XY may also elect to appeal aspects of the ruling that were in Trans Ova's favor. Moreover, Trans Ova and the Company could elect to enter into a settlement agreement in order to avoid the further costs and uncertainties of litigation, to modify the license to XY's technologies, or to recover monetary damages related to Trans Ova's antitrust counterclaims.

In May 2016, two 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 purchasers of Intrexon'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. The consolidated amended complaint names as defendants Intrexon and certain of Intrexon's current and former officers (the "Defendants"). It alleges, among other things, that the Defendants made materially false and/or misleading statements during the Class Period with respect to the Company's business, operations, and prospects in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended. The plaintiffs' claims are based 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 Company intends to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of this case.

In July 2016, a purported shareholder derivative action captioned Basile v. Kirk et al. was filed in the Circuit Court of Fairfax County, Virginia, against certain of the Company's directors, the Company's CEO, and Third Security, and naming the Company as a nominal defendant. 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. 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 Board of Directors of the Company appointed a Special Litigation Committee consisting of independent directors to investigate the claims and allegations made in the derivative action and to decide on behalf of the Company whether the claims and allegations should be pursued. The action has been stayed pending the report of the Special Litigation Committee.

The Company may become subject to other claims and assessments from time to time in the ordinary course of business. 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 of September 30, 2016 and December 31, 2015, 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.