Share-Based Payments

12 Months Ended

Dec. 31, 2019

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,
	2019		2018		2017
Cost of products	$	20	$	78	$	116
Cost of services	220		237		322
Research and development	4,784		6,850		7,654
Selling, general and administrative	11,419		25,259		28,801
Discontinued operations	2,507		3,872		4,683
Total	$	18,950	$	36,296	$	41,576

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, 2019, there were 378,409 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, 2019, there were 25,000,000 shares authorized for issuance under the 2013 Plan, of which 8,643,873 stock options and 1,781,982 RSUs were outstanding and 8,991,369 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, 2019, there were 5,000,000 shares authorized for issuance under the 2019 Plan, of which no awards were outstanding and 4,087,444 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, 2016	11,640,383		$	31.25		8.21
Granted	3,920,950		21.47
Adjustment due to dividend (Note 14)	46,766		31.11
Exercised	(149,429	)	(6.37		)
Forfeited	(3,797,105	)	(28.37		)
Expired	(278,818	)	(33.18		)
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
Exercisable at December 31, 2019	6,264,194		24.89			5.20

Total unrecognized compensation costs related to unvested awards as of December 31, 2019 were $16,057, and are expected to be recognized over a weighted-average period of approximately two years.

The weighted average grant date fair value of options granted during 2019, 2018 and 2017 was $3.79, $7.94 and $12.19, respectively. The aggregate intrinsic value of options exercised during 2019, 2018 and 2017 was $66, $356 and $2,429, 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, 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

The following table summarizes additional information about stock options outstanding as of December 31, 2018:



					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	—	$	19.52	1,973,818	$	13.70	7.54	$	169	833,007	$	12.80	4.85	$	169
$	19.85	—	$	20.94	1,914,763	20.93		7.99	—		500,263	20.92		7.67	—
$	21.00	—	$	27.08	2,057,126	23.29		7.26	—		1,248,370	23.01		6.69	—
$	27.10	—	$	29.56	2,666,109	29.19		5.28	—		2,593,151	29.20		5.23	—
$	29.58	—	$	65.08	2,481,247	47.24		6.59	—		1,827,728	47.65		6.54	—
					11,093,063	$	27.95	6.81	$	169	7,002,519	$	30.37	5.97	$	169

RSU activity was a 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

Total unrecognized compensation costs related to unvested RSU awards as of December 31, 2019 were $10,795 and are expected to be recognized over a weighted-average period of approximately two 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, receives a base salary of $200 per month 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 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, which is subject to renewal annually by the compensation committee of the board of directors of the Company, expired March 31, 2019. In April 2019, the Company entered into a new RSU agreement through March 31, 2020, pursuant to which the base salary and lock-up terms remained unchanged and the number of fully-vested shares of Precigen common stock paid monthly was subsequently calculated 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. 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 $1,868, $1,956, and $1,908 for the years ended December 31, 2019, 2018 and 2017, respectively.