Precigen(PGEN) - 2025 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements This report contains forward-looking statements subject to substantial risks and uncertainties, cautioning readers that actual results may differ materially - This Quarterly Report contains forward-looking statements involving substantial risks and uncertainties, covering strategy, future events, operations, financial position, costs, prospects, and market growth. Readers are cautioned not to place undue reliance on these statements, as actual results could differ materially due to factors discussed in the report, particularly in 'Risk Factors'[10][12][13] PART I - FINANCIAL INFORMATION This section details the unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Condensed Consolidated Financial Statements (unaudited) This section presents Precigen's unaudited condensed consolidated financial statements, detailing its financial position, performance, and cash flows Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets provide a snapshot of the company's financial position, showing a decrease in total assets and a shift from shareholders' equity to a deficit | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash and cash equivalents | $13.76 | $29.52 | | Short-term investments | $45.99 | $68.39 | | Total current assets | $62.76 | $102.41 | | Total assets | $101.90 | $145.27 | | Total current liabilities | $23.19 | $21.52 | | Warrant liabilities | $78.56 | $50.54 | | Total liabilities | $107.79 | $78.54 | | Series A Preferred Stock (Mezzanine equity) | $30.88 | $28.22 | | Total shareholders' (deficit) equity | $(36.78) | $38.51 | Condensed Consolidated Statements of Operations The company reported a reduced net loss for both the three and six months ended June 30, 2025, primarily due to lower operating expenses despite increased SG&A | Metric (in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $0.86 | $0.72 | $2.20 | $1.78 | | Operating expenses | $32.62 | $61.56 | $56.56 | $87.03 | | Operating loss | $(31.76) | $(60.84) | $(54.36) | $(85.25) | | Change in fair value of warrant liabilities | $4.46 | $— | $(28.02) | $— | | Total other (expense) income, net | $5.12 | $0.36 | $(26.43) | $1.00 | | Net loss | $(26.64) | $(58.79) | $(80.80) | $(82.53) | | Net loss per share, basic and diluted | $(0.09) | $(0.23) | $(0.27) | $(0.33) | Condensed Consolidated Statements of Comprehensive Loss The Condensed Consolidated Statements of Comprehensive Loss show a significant reduction in comprehensive loss for Q2 2025, while the six-month loss remained stable | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(26.64) | $(58.79) | $(80.80) | $(82.53) | | Other comprehensive loss: | | | | | | Unrealized (loss) gain on investments | $(0.00) | $0.02 | $(0.00) | $0.02 | | Loss on foreign currency translation adjustments | $— | $(0.13) | $— | $(0.98) | | Comprehensive loss | $(26.64) | $(58.90) | $(80.80) | $(83.49) | Condensed Consolidated Statements of Mezzanine Equity and Shareholders' Equity (Deficit) The statements reflect a shift from shareholders' equity to a deficit as of June 30, 2025, primarily due to net loss and PIK dividends on preferred stock | Metric (in millions, except share data) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Preferred Stock (Mezzanine Equity) | $30.88 | $28.22 | | Additional Paid-in Capital | $2,134.71 | $2,129.21 | | Accumulated Deficit | $(2,171.50) | $(2,090.71) | | Total Shareholders' (Deficit) Equity | $(36.78) | $38.51 | - PIK dividends on preferred stock increased mezzanine equity by $1.37 million for the three months ended June 30, 2025, and $2.67 million for the six months ended June 30, 2025, contributing to the change in equity structure[27][28] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, the company experienced a net decrease in cash due to operating and financing activities, partially offset by investing activities | Cash Flow Activity (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(35.30) | $(37.20) | | Net cash provided by investing activities | $21.98 | $39.00 | | Net cash (used in) provided by financing activities | $(2.44) | $0.05 | | Effect of exchange rate changes | $0.01 | $(0.10) | | Net (decrease) increase in cash | $(15.76) | $1.76 | Notes to the Condensed Consolidated Financial Statements These notes provide comprehensive disclosures and explanations for the condensed consolidated financial statements, detailing operational focus, accounting policies, and financial information 1. Organization Precigen is a discovery and clinical-stage biopharmaceutical company focused on gene and cell therapies, strategically prioritizing PRGN-2012 and operating as a single segment - Precigen is a dedicated discovery and clinical-stage biopharmaceutical company advancing gene and cell therapies, with a primary focus on immuno-oncology, autoimmune disorders, and infectious diseases[36] - The lead product candidate, PRGN-2012, an AdenoVerse® gene therapy for recurrent respiratory papillomatosis (RRP), received priority review for its Biologics License Application (BLA) from the FDA, with a PDUFA target action date of August 27, 2025[36] - In 2024, the company initiated a strategic prioritization, including the shutdown of ActoBio operations and a reduction of over 20% of its workforce, to focus resources on the potential commercialization of PRGN-2012[39][40] 2. Summary of Significant Accounting Policies This section outlines the basis of presentation for unaudited financial statements, addresses going concern status, and details accounting policies for R&D, investments, and financial instruments - The company incurred a net loss of $80.80 million and used $35.30 million cash in operations for the six months ended June 30, 2025, resulting in an accumulated deficit of $2.17 billion, raising substantial doubt about its ability to continue as a going concern[44] - Warrants are classified as liability-classified instruments, with changes in fair value included in the Consolidated Statements of Operations, due to a feature allowing for additional warrants via PIK dividends on Series A Preferred Stock[60][78] - Series A Preferred Stock is classified as 'mezzanine equity' because its redemption is contingent on events not solely within the company's control, such as a 'fundamental change' at the option of the holder[61][105] 3. Collaboration and Licensing Revenue The company recognized no collaboration and licensing revenue for the reported periods, with deferred revenue primarily from historical agreements - No collaboration and licensing revenue was recognized during the three and six months ended June 30, 2025, and 2024[69] | Deferred Revenue (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Collaboration and licensing agreements- Long-term liability | $1.82 | $1.82 | | Prepaid product and service revenues - Short-term liability | $0.41 | $0.71 | | Total | $2.23 | $2.52 | 4. Investments The company's available-for-sale investments, primarily U.S. government debt securities, decreased to $46.0 million as of June 30, 2025, with all investments due within one year | Available-for-Sale Investments (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------- | :------------ | :---------------- | | U.S. government debt securities | $43.46 | $67.47 | | Certificates of deposit | $2.47 | $0.85 | | Corporate bonds | $0.06 | $0.07 | | Total Fair Value | $45.99 | $68.39 | - All available-for-sale investments were classified as due within one year for both periods[73] 5. Fair Value Measurements Financial assets and liabilities are measured at fair value, with warrant liabilities and PIK dividends on preferred stock valued using Level 3 unobservable inputs | Financial Instrument (in millions) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Warrant liabilities | $78.56 | $50.54 | - The company recorded a non-cash gain of $4.46 million for the three months ended June 30, 2025, and a non-cash expense of $28.02 million for the six months ended June 30, 2025, related to the change in fair value of warrant liabilities[83] - Accrued PIK dividends of $2.67 million are included in Series A Preferred Stock as of June 30, 2025, valued using a discounted cash flow analysis with significant unobservable inputs (Level 3)[85][86] 6. Property, Plant and Equipment, Net Property, plant and equipment, net, increased slightly to $14.7 million as of June 30, 2025, with decreased depreciation expense compared to the prior year | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Property, plant and equipment, net | $14.70 | $13.83 | | Depreciation Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $0.31 | $0.39 | $0.62 | $0.77 | 7. Goodwill and Intangible Assets, Net Goodwill decreased to $15.2 million due to a $3.9 million impairment charge, while intangible assets and amortization expense also decreased | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Goodwill | $15.23 | $19.14 | | Intangible assets, net | $3.82 | $4.46 | - An impairment charge of $3.91 million was recorded in the second quarter of 2025 for the Exemplar reporting unit due to lowered financial expectations[89][90] | Amortization Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization expense | $0.32 | $1.21 | $0.64 | $2.42 | 8. Debt Exemplar Genetics maintains a $5.0 million revolving line of credit with American State Bank, maturing November 1, 2025, with no outstanding balance - Exemplar has a $5.00 million revolving line of credit with American State Bank, maturing on November 1, 2025, at an 8.00% interest rate[92] - There was no outstanding balance on the line of credit as of June 30, 2025, and December 31, 2024[92] 9. Income Taxes The company recorded minimal income tax expense, with a valuation allowance offsetting net deferred tax assets due to a history of net losses | Income Tax (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax (expense) benefit | $(0.00) | $1.69 | $(0.00) | $1.72 | - The company's net deferred tax assets are offset by a valuation allowance due to its history of net losses and inability to confirm recovery of tax benefits[95] 10. Mezzanine Equity and Shareholders' Equity (Deficit) Precigen increased authorized common stock to 700 million shares, and issued Series A Preferred Stock and warrants for $79 million gross proceeds, with preferred stock classified as mezzanine equity - On July 25, 2025, Precigen increased its authorized shares of common stock to 700 million shares[98] - On December 30, 2024, the company issued 79 thousand shares of 8.00% Series A Convertible Perpetual Preferred Stock and warrants to purchase 52.67 million shares of common stock for gross proceeds of $79.00 million[99] - Dividends on the Series A Preferred Stock are paid in kind for the first two years, increasing the stated value and liquidation preference, and the stock is convertible into common stock at the holder's option[100][102] - The Series A Preferred Stock is classified as mezzanine equity because it is redeemable at the option of the holder upon a 'fundamental change' not solely within the company's control[105] 11. Share-Based Payments The company recognized $1.6 million in stock-based compensation for Q2 2025 and $4.3 million for YTD 2025, with 1.5 million PSU shares vesting upon BLA submission | Stock-Based Compensation Expense (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total | $1.64 | $1.96 | $4.32 | $4.54 | - Approximately 1.5 million shares vested during the six months ended June 30, 2025, following the certification of the first performance milestone related to the submission of the BLA for PRGN-2012 to the FDA[116] - The performance milestone related to FDA approval of the BLA for PRGN-2012 was determined to be not probable of achievement as of the award grant date, and thus no stock-based compensation expense was recognized for this milestone[117][118] 12. Operating Leases Operating lease costs decreased, with total lease liabilities of $5.15 million and a weighted average remaining lease term of 4.40 years as of June 30, 2025 | Lease Costs (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease costs | $0.42 | $0.61 | $0.83 | $1.22 | | Short-term lease costs | $0.01 | $0.02 | $0.02 | $0.04 | | Variable lease costs | $0.09 | $0.09 | $0.18 | $0.18 | | Total Lease costs | $0.51 | $0.72 | $1.03 | $1.44 | | Lease Liabilities (in millions) | June 30, 2025 | | :------------------------------- | :------------ | | Total lease liabilities | $5.15 | | Current portion | $0.93 | | Long-term portion | $4.22 | - The weighted average remaining lease term was 4.40 years as of June 30, 2025[122] 13. Commitments and Contingencies The company is involved in legal proceedings and has indemnification accruals of $3.2 million, but management does not anticipate a material adverse effect - The company is involved in ongoing legal proceedings, including a derivative shareholder action and a lawsuit related to disclosures about the MBP program[123] - Indemnification accruals of $3.21 million were recorded as of June 30, 2025, related to the sale of its wholly-owned subsidiary, Trans Ova[125] - Management does not believe that any current legal 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[126] 14. Segments In Q1 2025, Precigen realigned its operations into a single segment, focusing on core therapeutic areas and using net loss to assess performance and allocate resources - In the first quarter of 2025, the company realigned its former two operating segments (Biopharmaceuticals and Exemplar) into one operating segment, focusing on developing and commercializing product candidates in immuno-oncology, autoimmune disorders, and infectious diseases[127] - The Chief Operating Decision Maker (CEO) now uses net loss to assess performance and allocate resources at a consolidated level[128] - Substantially all of the company's long-lived assets were held in the United States, with no revenues derived from foreign countries for any periods presented[129] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Precigen's financial condition and results of operations, detailing its strategic shift, financial challenges, and capital requirements Overview Precigen is a clinical-stage biopharmaceutical company focused on gene and cell therapies, strategically prioritizing PRGN-2012 and pausing other UltraCAR-T trials - Precigen is a discovery and clinical-stage biopharmaceutical company advancing gene and cell therapies, leveraging proprietary technology platforms including UltraCAR-T, AdenoVerse immunotherapy, and ActoBiotics[134][135] - In August 2024, the company announced a strategic prioritization of its pipeline to focus on the development of its lead program, PRGN-2012, for recurrent respiratory papillomatosis (RRP)[137][138] - This prioritization included pausing enrollment in PRGN-3005 and PRGN-3007 UltraCAR-T clinical trials, minimizing UltraCAR-T spending, and completing the shutdown of the ActoBio subsidiary operations[137][145][146][147] - The Biologics License Application (BLA) for PRGN-2012 has been submitted and granted priority review by the FDA, with a PDUFA target action date set for August 27, 2025[138][140] Financial overview Precigen has incurred significant losses with an accumulated deficit of $2.2 billion, and future profitability depends on successful product development and commercialization, especially PRGN-2012 - The company has incurred significant losses since its inception, with an accumulated deficit of $2.2 billion as of June 30, 2025, and expects to continue incurring significant losses in the foreseeable future[149][176] - Transition to profitability depends on the successful development, approval, and commercialization of product candidates, and achieving sufficient revenues to support the cost structure[45][149] - Future revenues will primarily depend on the ability to advance proprietary programs and bring products, especially PRGN-2012, to market, with historical collaboration revenues expected to be minimal[154] Sources of revenue Precigen's primary revenues are from its Exemplar subsidiary's genetically engineered miniature swine models, with future growth dependent on proprietary product commercialization - Primary revenues currently arise from Exemplar, which generates product and service revenues through the development and sale of genetically engineered miniature swine models[153] - Future revenues will primarily depend on the company's ability to advance and commercialize its own programs and products, with collaboration revenues expected to be minimal or zero in the near term, unless new strategic transactions are entered into[154] Cost of products and services Costs of products and services, primarily from the Exemplar segment, slightly increased due to higher revenues, encompassing labor, supplies, feed, and facility charges - Cost of products and services, all related to the Exemplar reporting segment, slightly increased primarily as a result of higher revenues at Exemplar[155][164][171] - These costs primarily include labor, drugs and supplies, feed used in production, and facility charges, with no significant impact from fluctuations in the price of livestock and feed on operating margins[155] Research and development expenses Research and development expenses decreased significantly by 27% for both the three and six months ended June 30, 2025, primarily due to ActoBio closure and reduced CRO costs, reflecting strategic prioritization | Research and Development Expenses (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $11.49 | $15.69 | $21.97 | $29.94 | | Change | $(4.21) | (26.8%) | $(7.98) | (26.6%) | - The decrease in R&D expenses was primarily due to a $3.80 million (Q2) and $5.60 million (YTD) decrease in costs associated with ActoBio operations after its closure in late 2024, and a $0.50 million (Q2) and $1.50 million (YTD) decrease at contract research organizations due to asset prioritization[165][172] Selling, general and administrative expenses Selling, general and administrative expenses increased significantly by 57% for Q2 2025 and 39% for YTD 2025, driven by PRGN-2012 commercial readiness efforts | SG&A Expenses (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Selling, general and administrative | $16.13 | $10.31 | $28.49 | $20.46 | | Change | $5.83 | 56.5% | $8.04 | 39.3% | - The increase in SG&A expenses was primarily associated with PRGN-2012 commercial readiness efforts[166][173] Other income (expense), net Total other income (expense), net, showed a significant increase in income for Q2 2025 due to decreased warrant liabilities fair value, but a substantial expense for YTD 2025 due to increased fair value | Other Income (Expense), Net (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total other income (expense), net | $5.12 | $0.36 | $(26.43) | $1.00 | | Change | $4.76 | >200% | $(27.43) | >(200%) | - The change was primarily driven by a $4.50 million decrease in the fair value of warrant liabilities for Q2 2025, influenced by a decrease in stock price, and a $28.00 million increase in the fair value of warrant liabilities for YTD 2025, influenced by an increase in stock price since December 31, 2024[168][175] Results of operations This section provides a detailed comparative analysis of the company's financial performance, highlighting changes in revenues, operating expenses, and net loss for the reported periods Comparison of the three months ended June 30, 2025 and the three months ended June 30, 2024 For Q2 2025, total revenues increased by 19.4%, while total operating expenses decreased by 47.0% due to significantly lower impairment charges, resulting in a 54.7% reduction in net loss | Metric (in millions) | June 30, 2025 | June 30, 2024 | Dollar Change | Percent Change | | :-------------------- | :------------ | :------------ | :------------ | :------------- | | Product revenues | $0.04 | $0.03 | $0.01 | 32.3% | | Service revenues | $0.78 | $0.67 | $0.11 | 16.0% | | Other revenues | $0.03 | $0.01 | $0.02 | 161.5% | | Total revenues | $0.86 | $0.72 | $0.14 | 19.4% | | Cost of product and services | $1.09 | $1.01 | $0.08 | 7.7% | | Research and development | $11.49 | $15.69 | $(4.21) | (26.8%) | | Selling, general and administrative | $16.13 | $10.31 | $5.83 | 56.5% | | Impairment of goodwill | $3.91 | $1.63 | $2.28 | 139.7% | | Impairment of other noncurrent assets | $— | $32.92 | $(32.92) | (100.0%) | | Total operating expenses | $32.62 | $61.56 | $(28.94) | (47.0%) | | Operating loss | $(31.76) | $(60.84) | $29.08 | (47.8%) | | Total other income (expense), net | $5.12 | $0.36 | $4.76 | >200% | | Loss before income taxes | $(26.64) | $(60.48) | $33.84 | (56.0%) | | Income tax (expense) benefit | $(0.00) | $1.69 | $(1.69) | (100.2%) | | Net loss | $(26.64) | $(58.79) | $32.15 | (54.7%) | Comparison of the six months ended June 30, 2025 and the six months ended June 30, 2024 For YTD 2025, total revenues increased by 23.3%, and total operating expenses decreased by 35.0% due to lower impairment charges, leading to a 2.1% reduction in net loss | Metric (in millions) | June 30, 2025 | June 30, 2024 | Dollar Change | Percent Change | | :-------------------- | :------------ | :------------ | :------------ | :------------- | | Product revenues | $0.24 | $0.17 | $0.08 | 44.4% | | Service revenues | $1.90 | $1.59 | $0.30 | 19.1% | | Other revenues | $0.06 | $0.02 | $0.04 | 171.4% | | Total revenues | $2.20 | $1.78 | $0.42 | 23.3% | | Cost of product and services | $2.19 | $2.09 | $0.10 | 4.9% | | Research and development | $21.97 | $29.94 | $(7.98) | (26.6%) | | Selling, general and administrative | $28.49 | $20.46 | $8.04 | 39.3% | | Impairment of goodwill | $3.91 | $1.63 | $2.28 | 139.7% | | Impairment of other noncurrent assets | $— | $32.92 | $(32.92) | (100.0%) | | Total operating expenses | $56.56 | $87.03 | $(30.48) | (35.0%) | | Operating loss | $(54.36) | $(85.25) | $30.89 | (36.2%) | | Total other income (expense), net | $(26.43) | $1.00 | $(27.43) | >(200%) | | Loss before income taxes | $(80.79) | $(84.25) | $3.46 | (4.1%) | | Income tax (expense) benefit | $(0.00) | $1.72 | $(1.72) | (100.2%) | | Net loss | $(80.80) | $(82.53) | $1.73 | (2.1%) | Liquidity and capital resources Precigen has an accumulated deficit of $2.2 billion and faces substantial doubt about its ability to continue as a going concern, relying on future capital raises and PRGN-2012 commercialization Sources of liquidity Precigen historically funded operations through equity, debt, and collaborations, holding $13.8 million in cash and $46.0 million in investments as of June 30, 2025 - As of June 30, 2025, the company had an accumulated deficit of $2.2 billion[176] | Metric (in millions) | June 30, 2025 | | :-------------------- | :------------ | | Cash and cash equivalents | $13.80 | | Investments | $46.00 | - Recent financing includes $30.9 million net proceeds from an August 2024 public offering of common stock and $78.5 million net proceeds from a December 2024 issuance of Series A Preferred Stock and warrants[177][178] Cash flows For YTD 2025, operating activities used $35.3 million in cash, investing activities provided $22.0 million, and financing activities used $2.4 million, resulting in a net decrease of $15.8 million in cash | Cash Flow Activity (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(35.30) | $(37.20) | | Net cash provided by investing activities | $21.98 | $39.00 | | Net cash (used in) provided by financing activities | $(2.44) | $0.05 | | Effect of exchange rate changes | $0.01 | $(0.10) | | Net (decrease) increase in cash | $(15.76) | $1.76 | - Significant noncash expenses for the six months ended June 30, 2025, included $28.0 million unrealized appreciation in warrant liabilities, $3.9 million goodwill impairment, and $4.3 million stock-based compensation[180] Future Capital Requirements Precigen's future capital requirements depend on R&D progress and commercialization efforts, facing substantial doubt about going concern and needing additional capital through various means - The company's ability to continue as a going concern is dependent upon the successful execution of management's plans, including the successful commercialization of PRGN-2012, and the receipt of future payments dependent on FDA approval[191][192] - Future capital requirements depend on factors such as R&D programs, manufacturing capabilities, commercial operations, regulatory approvals, and legal activities[186][187] - Additional capital may be raised through equity offerings, debt financings, strategic alliances, asset sales, or licensing arrangements, which could result in dilution to common shareholders or relinquishing valuable rights[186][188][192] Contractual obligations and commitments Precigen's significant contractual obligations include $6.7 million in operating leases and $4.6 million in R&D commitments, with potential future milestone and royalty payments | Contractual Obligation (in millions) | Total | Less Than 1 Year | 1 - 3 Years | 3 - 5 Years | More Than 5 Years | | :------------------------------------ | :---- | :--------------- | :---------- | :---------- | :---------------- | | Operating leases | $6.75 | $1.49 | $2.78 | $2.48 | $— | - As of June 30, 2025, the company had research and development commitments with third parties totaling $4.6 million that had not yet been incurred[194] Off-balance sheet arrangements Precigen did not have any off-balance sheet arrangements during the periods presented - The company did not have, and does not currently have, any off-balance sheet arrangements as defined under SEC rules during the periods presented[195] Critical accounting policies and estimates There have been no material changes to the company's critical accounting policies from those described in its Annual Report on Form 10-K - There have been no material changes to the company's critical accounting policies from those described in 'Management's Discussion and Analysis of Financial Condition and Results of Operations' included in its Annual Report[197] Recent accounting pronouncements Information regarding recent accounting pronouncements and their impact is provided in Note 2 to the financial statements - For information with respect to recent accounting pronouncements and their impact, refer to 'Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 2'[198] Item 3. Quantitative and Qualitative Disclosures About Market Risk Precigen's primary market risk exposure is to interest rate fluctuations on its cash, cash equivalents, and investments, with no material impact expected from a 100 basis point increase | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Cash, cash equivalents and short-term and long-term investments | $59.8 | $97.9 | - A hypothetical 100 basis point increase in interest rates would not materially affect the fair value of the company's interest-sensitive financial instruments[201] Item 4. Controls and Procedures Management concluded Precigen's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[202] - There has been no change in internal control over financial reporting during the three months ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting[203] PART II - OTHER INFORMATION This section provides information on legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, and exhibits Item 1. Legal Proceedings Precigen is involved in various legal matters, including governmental investigations and shareholder actions, but does not anticipate a material adverse effect on its financial condition - The company is involved in litigation or legal matters, including governmental investigations, but does not believe any will have a material adverse effect on its business, financial condition, results of operations, or cash flows as of June 30, 2025[206] - Further discussion of ongoing legal matters is provided in Note 13 to the Condensed Consolidated Financial Statements[207] Item 1A. Risk Factors There are no additional material updates or changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There are no additional material updates or changes to the risk factors since the filing of the Annual Report on Form 10-K for the year ended December 31, 2024[208] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds for the period - None[210] Item 3. Defaults on Senior Securities The company reported no defaults on senior securities for the period - None[211] Item 4. Mine Safety Disclosures This item is not applicable to Precigen, Inc. - Not applicable[212] Item 5. Other Information The company reported no other information for the period - None[213] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including amendments to the articles of incorporation, CEO/CFO certifications, and the Interactive Data File - Exhibits include Articles of Amendment to the Amended and Restated Articles of Incorporation, certifications from the CEO and CFO (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and the Interactive Data File (XBRL) for the financial statements[214] Signatures The Form 10-Q is duly signed on behalf of Precigen, Inc. by its Chief Financial Officer, Harry Thomasian Jr., on August 12, 2025 - The report was signed by Harry Thomasian Jr., Chief Financial Officer (Principal Financial and Accounting Officer) of Precigen, Inc., on August 12, 2025[219]