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Related Party Transactions
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Third Security and Affiliates
The Company's Executive Chairman and Chairman of the board of directors is also the Senior Managing Director and CEO of Third Security and owns 100% of the equity interests of Third Security. In November 2015, the independent members of Precigen's board of directors, with the recommendation of the audit committee of the board of directors, approved the execution of a Services Agreement ("Services Agreement") with Third Security pursuant to which Third Security provided the Company with certain professional, legal, financial, administrative, and other support services necessary to support the Company and its Executive Chairman. The Services Agreement provided for a term of one year, could be terminated by the Company at any time, and could be extended only by agreement of the parties, including approval of a majority of the independent members of Precigen's board of directors. The independent members of Precigen's board of directors, with the recommendation of the audit committee of the board of directors, subsequently approved extensions of the Services Agreement through January 1, 2020 at which point it was not further extended. Under the Services Agreement, as consideration for providing these services, Third Security was entitled to a fee paid in the form of fully-vested shares of Precigen common stock that approximates $800 per month. Through 2018, the number of shares of common stock was calculated based on the closing price of the Company's common stock on the 15th day of each month and issued to Third Security at the end of the month. In 2019, the number of shares of common stock was calculated based on the volume weighted average of the closing price of the Company's common stock over the 30-day period ending on the 15th day of the calendar month when the applicable services were provided. Through May 2019, the payments made by the Company under the Services Agreement constitute, in the aggregate, an award under the 2013 Plan and are subject to the terms of the 2013 Plan. Following the effectiveness of the 2019 Plan in June 2019, subsequent payments made by the Company under the Services Agreement constitute, in the aggregate, an award under the 2019 Plan and are subject to the terms of the 2019 Plan (Note 15). For the years ended December 31, 2019, 2018 and 2017, the Company issued 1,606,062 shares, 696,033 shares, and 500,650 shares, respectively, with values of $8,233, $8,324, and $8,704, respectively, to Third Security as payment for services pursuant to the Services Agreement. The Services Agreement was not extended and was allowed to expire on January 1, 2020. In addition to the foregoing Services Agreement, the Company reimburses Third Security for certain out-of-pocket expenses incurred on the Company's behalf, and the total expenses incurred by the Company under this arrangement was $26, $47, and $409 for the years ended December 31, 2019, 2018 and 2017, respectively.
See also Note 15 regarding compensation arrangements between the Company and its Executive Chairman.
In October 2017, the Company entered into a Preferred Stock Equity Facility ("Preferred Stock Equity Facility") with an affiliate of Third Security ("Third Security Affiliate"). Under the Preferred Stock Equity Facility, the Company could, from time to time at its sole and exclusive option, issue and sell to the Third Security Affiliate, up to $100,000 of newly issued Series A Redeemable Preferred Stock ("Series A Preferred Stock"). In conjunction with the Company's July 2018 registered underwritten public offering of Convertible Notes (Note 12), the Preferred Stock Equity Facility was terminated. No shares of Series A Preferred Stock had been issued under the Preferred Stock Equity Facility.
The Company also subleases certain administrative offices to Third Security. The significant terms of the lease mirror the terms of the Company's lease with the landlord, and the Company recorded sublease income of $89, $89, and $43 for the years ended December 31, 2019, 2018 and 2017, respectively.
See Notes 1, 3, and 23 regarding additional transactions with affiliates of Third Security.
Transactions with ECC Parties
Entities controlled by Third Security are considered related parties and are disclosed below. The Company also disclosed entity relationships below where it holds more than a de minimis equity interest, including equity securities received as upfront or milestone consideration, and that also are party to a collaboration with the Company.
In June 2016, the Company received 100,000 shares of Series 1 Preferred Stock (the "Preferred Shares") of ZIOPHARM, with a per share stated value of $1,200, as consideration for amending their two previously existing ECC agreements (Note 6). The Company received a monthly dividend, paid in additional Preferred Shares, equal to $12.00 per Preferred Share held per month divided by the stated value of the Preferred Shares. The Company elected the fair value option to account for the Preferred Shares whereby the value of the Preferred Shares was adjusted to fair value as of each reporting date and unrealized gains and losses were reported in the consolidated statements of operations. In conjunction with the ZIOPHARM License Agreement in October 2018 (Note 6), the Company returned to ZIOPHARM all of the Preferred Shares owned or accrued by the Company as of the effective date of the agreement. During the years ended December 31, 2018 and 2017, the Company recognized $14,793 and $16,717 of dividend income in the accompanying consolidated statements of operations, respectively. Following the transaction in October 2018, ZIOPHARM is no longer considered a related party.
In March 2017, Fibrocell sold Series A Convertible Preferred Stock (the "Convertible Preferred Shares") convertible into shares of Fibrocell common stock and warrants to purchase shares of Fibrocell common stock to certain institutional and accredited investors, including the Company and affiliates of Third Security. The Company paid $1,161 in exchange for 1,161 Convertible Preferred Shares and warrants to acquire 99,769 shares of Fibrocell common stock. The Convertible Preferred Shares accrued dividends at 4% per annum, compounded quarterly, increasing the stated value of the shares. The Company also holds a promissory note which was convertible into shares of Fibrocell common stock ("convertible note") and warrants to purchase shares of Fibrocell common stock. The Company elected the fair value option to account for these investments whereby the values of investments were adjusted to fair value as of each reporting date and unrealized gains and losses were reported in the consolidated statements of operations. As of December 31, 2018, the fair value of the Company's investment in Fibrocell preferred stock totaled $191, and the value of the convertible note and warrants totaled $120, all of which are included in other assets on the accompanying consolidated balance sheet. The Company also owned common shares of Fibrocell previously acquired through collaborations and other transactions, and the fair value of these common shares was $640 as of December 31, 2018. In December 2019, Fibrocell was acquired by Castle Creek, and as a result, the Company received $1,280 in December 2019 for its common shares and received a total of $3,311 in January 2020 for the Convertible Preferred Shares and the convertible note, including accrued interest thereon. The $3,311 is included in other receivables on the accompanying consolidated balance sheet as of December 31, 2019. The Company recognized a total gain of $3,222 on the change in fair value of these instruments, which is included in total other income (expense), net, in the accompanying consolidated statement of operations for the year ended December 31, 2019. Subsequent to the acquisition by Castle Creek, Fibrocell is no longer a related party.
During 2018, the Company mutually terminated each of its ECC agreements with Histogenics Corporation ("Histogenics"), OvaScience, Inc., and Synthetic Biologics, Inc. ("Synthetic Biologics"). Upon termination of these ECCs, the Company recognized the remaining deferred revenue totaling $11,877.
In December 2017, the Company purchased certain property and equipment comprising the pilot plant production facility for its energy programs for $2,812 from Intrexon Energy Partners. The Company intends to use the pilot plant to support the collaborations with Intrexon Energy Partners and Intrexon Energy Partners II and its own research programs.
Other Related Parties
In June 2015, the Company entered into an agreement with Harvest, an investment fund sponsored by Harvest Capital Strategies, LLC, and a related party based on ownership in the fund by affiliates of Third Security. Harvest was established to invest in life science research and development start-up opportunities that the Company offered to Harvest with exclusive rights of first-look and first negotiation. Based on this agreement, Harvest established six new collaboration entities, each of which entered into an ECC with the Company in a designated field. The terms of such ECCs were negotiated between the Company and Harvest. As consideration for providing exclusive rights of first-look and first negotiation for start-up opportunities, the Company received a portion of the management fee collected by the fund sponsor of Harvest. These fees are included in other income in the accompanying consolidated statement of operations and totaled $1,839 for the year ended December 31, 2017. In September 2017, the commitment period for Harvest was terminated and, as a result, the agreement with Harvest terminated. The termination of the agreement had no effect on the existing collaborations with Harvest-controlled entities. See Note 4 for further discussion of the asset acquisition of certain Harvest entities.