Precigen(US:PGEN)2021-05-10 20:49PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Condensed Consolidated Financial Statements (unaudited) This section presents Precigen, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed notes Condensed Consolidated Balance Sheets Total assets increased to $407.0 million, liabilities decreased to $232.2 million, and shareholders' equity grew to $174.8 million as of March 31, 2021 Condensed Consolidated Balance Sheet Data (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $27,355 | $51,792 | | Total current assets | $144,118 | $148,948 | | Total assets | $406,984 | $314,587 | | Liabilities & Equity | | | | Total current liabilities | $25,243 | $42,127 | | Total liabilities | $232,189 | $247,413 | | Total shareholders' equity | $174,795 | $67,174 | | Total liabilities and shareholders' equity | $406,984 | $314,587 | Condensed Consolidated Statements of Operations Total revenues decreased to $24.5 million, while net loss improved significantly to $17.3 million for the three months ended March 31, 2021 Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total revenues | $24,511 | $29,838 | | Operating loss | $(17,688) | $(16,600) | | Loss from continuing operations | $(21,844) | $(20,846) | | Income (loss) from discontinued operations | $4,526 | $(35,152) | | Net loss | $(17,318) | $(55,998) | | Net loss per share, basic and diluted | $(0.09) | $(0.35) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $16.4 million, while financing activities provided $121.0 million, resulting in a $24.5 million net decrease in cash Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(16,384) | $(27,743) | | Net cash used in investing activities | $(129,102) | $(36,553) | | Net cash provided by financing activities | $121,040 | $34,151) | | Net decrease in cash, cash equivalents, and restricted cash | $(24,457) | $(30,184) | Notes to the Condensed Consolidated Financial Statements These notes detail accounting policies, business organization, discontinued operations, revenue recognition, debt structure, and confirm sufficient liquidity for the next year - The company is a synthetic biology firm focusing on gene and cellular therapies for immuno-oncology, autoimmune disorders, and infectious diseases. It operates through subsidiaries including PGEN Therapeutics, ActoBio, and Exemplar343536 - The company completed the wind-down of its methane bioconversion subsidiary, MBP Titan, in January 2021, resulting in a gain of $4.6 million from lease termination and a gain of $0.46 million on asset sales, included in income from discontinued operations for Q1 20215556 - In January 2021, the company closed a public offering of 17,250,000 shares of common stock, resulting in net proceeds of $121.0 million117 - As of March 31, 2021, the company had $200 million in principal outstanding on its 3.50% convertible senior notes due 2023, with a carrying value of $170.9 million108 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's transition to a clinical-stage biopharmaceutical focus, reviewing segment performance, financial results, and confirming sufficient liquidity for the next 12 months - Precigen is a clinical-stage biopharmaceutical company focused on gene and cell therapies for immuno-oncology, autoimmune disorders, and infectious diseases, utilizing platforms like UltraCAR-T, AdenoVerse, and ActoBiotics157158 - Key clinical programs include PRGN-3005 (ovarian cancer), PRGN-3006 (AML), PRGN-2009 (HPV+ tumors), PRGN-2012 (RRP), and AG019 (type 1 diabetes), with ongoing preclinical programs and the UltraPorator device for rapid UltraCAR-T manufacturing159160 Results of Operations Comparison (in thousands) | Line Item | Q1 2021 | Q1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $24,511 | $29,838 | $(5,327) | (17.9)% | | Operating loss | $(17,688) | $(16,600) | $(1,088) | 6.6% | | Loss from continuing operations | $(21,844) | $(20,846) | $(998) | 4.8% | | Net loss | $(17,318) | $(55,998) | $38,680 | (69.1)% | Segment Adjusted EBITDA (in thousands) | Segment | Q1 2021 | Q1 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Biopharmaceuticals | $(8,854) | $(10,022) | $1,168 | 11.7% | | Exemplar | $1,806 | $250 | $1,556 | >200% | | Trans Ova | $6,421 | $(457) | $6,878 | >200% | - The company believes its existing liquid assets of $27.4 million in cash and $181.9 million in investments will be sufficient to fund operations and capital requirements for at least the next 12 months221230 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuations on its $209.3 million cash and investments, with no material impact expected from a 100 basis point rate increase - The company is exposed to interest rate risk on its $209.3 million in cash, cash equivalents, and investments, with the portfolio structured to preserve principal and maintain liquidity246 - Management believes a hypothetical 100 basis point increase in interest rates would not have a material effect on the fair value of its financial instruments, and losses would only be realized upon sale before maturity246 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting - The CEO and interim Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2021247 - No material changes were made to the company's internal control over financial reporting during the first quarter of 2021248 PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings The company is involved in various legal matters, none of which are expected to have a material adverse effect on its financial condition or operations - The company does not believe that any ongoing legal matters will have a material adverse effect on its business, financial condition, or cash flows as of March 31, 2021251 Item 1A. Risk Factors No material updates or changes to the company's previously disclosed risk factors have occurred - No material updates or changes to the company's risk factors have occurred since the filing of the Annual Report253 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None255 Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO and CFO certifications and Interactive Data Files - The report includes certifications from the CEO and interim Principal Financial Officer as required by the Sarbanes-Oxley Act, as well as Interactive Data Files (XBRL)260