pgen-20230331

false2023Q1000135609012/31http://fasb.org/us-gaap/2022#AccountingStandardsUpdate202006MemberP5DP1YRelated Party Transactions

Third Security and Affiliates

The Company's Executive Chairman is also the Senior Managing Director and Chairman of Third Security and owns 100% of the equity interests of Third Security. Through December 2019, the Company was party to 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. Following the expiration of the Services Agreement, the Company entered into a new agreement with Third Security under which the Company reimburses Third Security for certain tax-related services performed by Third Security as requested by the Company which expired on December 31, 2021. As the Company evaluates its alternatives, it continues to utilize these services on a limited basis under the terms of the original agreement. The Company also reimburses Third Security for certain out-of-pocket expenses incurred on the Company's behalf prior to and after the expiration of the Services Agreement under a separate agreement. The total expenses incurred by the Company under these arrangements were $0 and $26 for the three months ended March 31, 2023 and 2022, respectively.

See also Note 12 regarding compensation arrangements between the Company and its Executive Chairman.

See Notes 1, 3, and 11 regarding additional transactions with affiliates of Third Security.

10002600013560902023-01-012023-03-3100013560902023-04-30xbrli:shares00013560902023-03-31iso4217:USD00013560902022-12-310001356090us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberpgen:TransOvaMember2023-03-31iso4217:USDxbrli:shares0001356090us-gaap:SegmentContinuingOperationsMemberus-gaap:ProductMember2023-01-012023-03-310001356090us-gaap:SegmentContinuingOperationsMemberus-gaap:ProductMember2022-01-012022-03-310001356090us-gaap:ServiceMemberus-gaap:SegmentContinuingOperationsMember2023-01-012023-03-310001356090us-gaap:ServiceMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-03-310001356090pgen:OtherMemberus-gaap:SegmentContinuingOperationsMember2023-01-012023-03-310001356090pgen:OtherMemberus-gaap:SegmentContinuingOperationsMember2022-01-012022-03-310001356090us-gaap:SegmentContinuingOperationsMember2023-01-012023-03-310001356090us-gaap:SegmentContinuingOperationsMember2022-01-012022-03-3100013560902022-01-012022-03-310001356090us-gaap:CommonStockMember2022-12-310001356090us-gaap:AdditionalPaidInCapitalMember2022-12-310001356090us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001356090us-gaap:RetainedEarningsMember2022-12-310001356090us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001356090us-gaap:CommonStockMember2023-01-012023-03-310001356090us-gaap:RetainedEarningsMember2023-01-012023-03-310001356090us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001356090us-gaap:CommonStockMember2023-03-310001356090us-gaap:AdditionalPaidInCapitalMember2023-03-310001356090us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001356090us-gaap:RetainedEarningsMember2023-03-310001356090us-gaap:CommonStockMember2021-12-310001356090us-gaap:AdditionalPaidInCapitalMember2021-12-310001356090us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001356090us-gaap:RetainedEarningsMember2021-12-3100013560902021-12-3100013560902021-01-012021-12-310001356090us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001356090us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001356090srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001356090us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001356090us-gaap:CommonStockMember2022-01-012022-03-310001356090us-gaap:RetainedEarningsMember2022-01-012022-03-310001356090us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001356090us-gaap:CommonStockMember2022-03-310001356090us-gaap:AdditionalPaidInCapitalMember2022-03-310001356090us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001356090us-gaap:RetainedEarningsMember2022-03-3100013560902022-03-310001356090us-gaap:StockOptionMember2023-01-012023-03-310001356090us-gaap:StockOptionMember2022-01-012022-03-310001356090us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001356090us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001356090us-gaap:WarrantMember2023-01-012023-03-310001356090us-gaap:WarrantMember2022-01-012022-03-310001356090pgen:A3.5ConvertibleNotesDue2023Member2023-03-310001356090us-gaap:ConvertibleDebtMember2023-01-012023-03-310001356090us-gaap:ConvertibleDebtMember2022-01-012022-03-310001356090srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate202006RetrospectiveMember2022-01-010001356090us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate202006RetrospectiveMember2022-01-010001356090us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate202006RetrospectiveMember2022-01-010001356090srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:AccountingStandardsUpdate202006RetrospectiveMember2022-01-012022-12-310001356090us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberpgen:TransOvaMember2022-08-18xbrli:pure0001356090us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberpgen:TransOvaMembersrt:MaximumMember2022-08-1800013560902022-08-182022-08-180001356090us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberpgen:TransOvaMember2023-01-012023-03-310001356090us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberpgen:TransOvaMembersrt:MaximumMember2023-03-310001356090us-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberus-gaap:ProductMemberpgen:TransOvaMember2023-01-012023-03-310001356090us-gaap:ServiceMemberus-gaap:DiscontinuedOperationsHeldForSaleOrDisposedOfBySaleMemberpgen:TransOvaMember2023-01-012023-03-310001356090us-gaap:SubsequentEventMemberpgen:AmendedLicensingAgreementBetweenAlaunosAndPrecigen2023Member2023-04-033023-04-030001356090us-gaap:CollaborativeArrangementMember2023-03-310001356090us-gaap:CollaborativeArrangementMember2022-12-310001356090pgen:PrepaidProductAndServiceRevenuesMember2023-03-310001356090pgen:PrepaidProductAndServiceRevenuesMember2022-12-310001356090pgen:DeferredRevenueOtherMember2023-03-310001356090pgen:DeferredRevenueOtherMember2022-12-310001356090us-gaap:USGovernmentDebtSecuritiesMember2023-03-310001356090us-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-03-310001356090us-gaap:CertificatesOfDepositMember2023-03-310001356090us-gaap:USGovernmentDebtSecuritiesMember2022-12-310001356090us-gaap:CertificatesOfDepositMember2022-12-310001356090us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-03-310001356090us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-03-310001356090us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2023-03-310001356090us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2023-03-310001356090us-gaap:USGovernmentAgenciesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2023-03-310001356090us-gaap:FairValueInputsLevel3Memberus-gaap:USGovernmentAgenciesDebtSecuritiesMember2023-03-310001356090us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMember2023-03-310001356090us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2023-03-310001356090us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2023-03-310001356090us-gaap:FairValueInputsLevel1Member2023-03-310001356090us-gaap:FairValueInputsLevel2Member2023-03-310001356090us-gaap:FairValueInputsLevel3Member2023-03-310001356090us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-12-310001356090us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2022-12-310001356090us-gaap:USGovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2022-12-310001356090us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMember2022-12-310001356090us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2022-12-310001356090us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2022-12-310001356090us-gaap:FairValueInputsLevel1Member2022-12-310001356090us-gaap:FairValueInputsLevel2Member2022-12-310001356090us-gaap:FairValueInputsLevel3Member2022-12-310001356090pgen:A3.5ConvertibleNotesDue2023Member2022-12-31pgen:reporting_unit0001356090us-gaap:IntellectualPropertyMember2023-03-310001356090us-gaap:CustomerRelationshipsMember2023-03-310001356090us-gaap:TrademarksMember2023-03-310001356090us-gaap:IntellectualPropertyMember2022-12-310001356090us-gaap:CustomerRelationshipsMember2022-12-310001356090us-gaap:TrademarksMember2022-12-310001356090us-gaap:RevolvingCreditFacilityMemberpgen:ExemplarGeneticsLLCMember2023-03-310001356090us-gaap:RevolvingCreditFacilityMemberpgen:ExemplarGeneticsLLCMember2022-12-310001356090pgen:A3.5ConvertibleNotesDue2023Member2018-07-310001356090pgen:A3.5ConvertibleNotesDue2023Member2018-07-012018-07-310001356090pgen:A3.5ConvertibleNotesDue2023Membersrt:MinimumMember2018-07-012018-07-31pgen:day0001356090pgen:A3.5ConvertibleNotesDue2023Membersrt:MaximumMember2018-07-012018-07-3100013560902022-08-180001356090us-gaap:ConvertibleDebtMember2023-01-012023-03-310001356090us-gaap:ConvertibleDebtMember2022-01-012022-12-310001356090pgen:A3.5ConvertibleNotesDue2023Member2023-01-012023-03-310001356090pgen:A3.5ConvertibleNotesDue2023Member2022-01-012022-03-3100013560902023-01-012023-01-310001356090pgen:RelatedPartiesAggregatedMember2023-01-012023-01-3100013560902018-07-012018-07-3100013560902018-07-310001356090srt:MaximumMember2022-08-092022-08-090001356090us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-03-310001356090us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310001356090us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001356090us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001356090pgen:CostOfProductsMember2023-01-012023-03-310001356090pgen:CostOfProductsMember2022-01-012022-03-310001356090pgen:CostOfServicesMember2023-01-012023-03-310001356090pgen:CostOfServicesMember2022-01-012022-03-310001356090us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001356090us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-03-310001356090us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-01-012023-03-310001356090us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-03-310001356090us-gaap:SegmentDiscontinuedOperationsMember2023-01-012023-03-310001356090us-gaap:SegmentDiscontinuedOperationsMember2022-01-012022-03-310001356090pgen:PrecigenStockOptionPlan2008PlanMember2023-03-310001356090pgen:PrecigenStockOptionPlan2019PlanMember2023-03-310001356090pgen:PrecigenStockOptionPlan2013PlanMember2023-03-310001356090us-gaap:SubsequentEventMemberpgen:PrecigenStockOptionPlan2013PlanMember2023-04-012023-04-300001356090pgen:PrecigenStockOptionPlanMember2022-12-310001356090pgen:PrecigenStockOptionPlanMember2022-01-012022-12-310001356090pgen:PrecigenStockOptionPlanMember2023-01-012023-03-310001356090pgen:PrecigenStockOptionPlanMember2023-03-310001356090srt:MinimumMember2023-03-310001356090srt:MaximumMember2023-03-310001356090pgen:PrecigenSecuritiesLitigationMember2022-11-172022-11-170001356090pgen:PrecigenSecuritiesLitigationMember2022-12-310001356090pgen:PrecigenSecuritiesLitigationMember2023-03-310001356090pgen:ExecutiveChairmanMemberpgen:ThirdSecurityMember2023-03-310001356090pgen:ThirdSecurityMember2023-01-012023-03-310001356090pgen:ThirdSecurityMember2022-01-012022-03-310001356090pgen:BiopharmaceuticalsSegmentMember2023-01-012023-03-310001356090pgen:BiopharmaceuticalsSegmentMember2022-01-012022-03-310001356090pgen:ExemplarSegmentMember2023-01-012023-03-310001356090pgen:ExemplarSegmentMember2022-01-012022-03-310001356090pgen:ReportableSegmentsMember2023-01-012023-03-310001356090pgen:ReportableSegmentsMember2022-01-012022-03-310001356090us-gaap:OperatingSegmentsMember2023-01-012023-03-310001356090us-gaap:OperatingSegmentsMember2022-01-012022-03-310001356090pgen:UpfrontAndMilestonePaymentsMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001356090pgen:UpfrontAndMilestonePaymentsMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001356090pgen:CorporateAndReconcilingItemsMember2023-01-012023-03-310001356090pgen:CorporateAndReconcilingItemsMember2022-01-012022-03-310001356090us-gaap:CorporateNonSegmentMember2023-01-012023-03-310001356090us-gaap:CorporateNonSegmentMember2022-01-012022-03-310001356090us-gaap:IntersegmentEliminationMember2023-01-012023-03-310001356090us-gaap:IntersegmentEliminationMember2022-01-012022-03-310001356090us-gaap:OperatingSegmentsMemberpgen:BiopharmaceuticalsSegmentMember2023-01-012023-03-310001356090pgen:ExemplarSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001356090pgen:TransOvaSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-03-310001356090us-gaap:IntersegmentEliminationMemberpgen:BiopharmaceuticalsSegmentMember2023-01-012023-03-310001356090pgen:ExemplarSegmentMemberus-gaap:IntersegmentEliminationMember2023-01-012023-03-310001356090us-gaap:IntersegmentEliminationMemberpgen:TransOvaSegmentMember2023-01-012023-03-310001356090us-gaap:OperatingSegmentsMemberpgen:BiopharmaceuticalsSegmentMember2022-01-012022-03-310001356090pgen:ExemplarSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-03-310001356090us-gaap:IntersegmentEliminationMemberpgen:BiopharmaceuticalsSegmentMember2022-01-012022-03-310001356090pgen:ExemplarSegmentMemberus-gaap:IntersegmentEliminationMember2022-01-012022-03-310001356090pgen:EliminationsAndReconcilingItemsMember2023-01-012023-03-310001356090pgen:EliminationsAndReconcilingItemsMember2022-01-012022-03-310001356090us-gaap:NonUsMember2023-03-310001356090us-gaap:NonUsMember2022-12-310001356090us-gaap:NonUsMember2023-01-012023-03-310001356090us-gaap:NonUsMember2022-01-012022-03-31

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-36042

PRECIGEN, INC.

(Exact name of registrant as specified in its charter)

Virginia

26-0084895

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

20374 Seneca Meadows Parkway

Germantown,

Maryland

20876

(Address of principal executive offices)

(Zip Code)

(301) 556-9900

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

PGEN

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 30, 2023, 255,482,753 shares of common stock, no par value per share, were issued and outstanding.

Table of Contents

PRECIGEN, INC.

FORM 10-Q

TABLE OF CONTENTS


Item No.		Page
PART I - FINANCIAL INFORMATION
1.	Condensed Consolidated Financial Statements (unaudited):	4
	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	4
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022	6
	Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022	7
	Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended March 31, 2023 and 2022	8
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	9
	Notes to the Condensed Consolidated Financial Statements	11
2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
3.	Quantitative and Qualitative Disclosures About Market Risk	39
4.	Controls and Procedures	40

PART II - OTHER INFORMATION
1.	Legal Proceedings	41
1A.	Risk Factors	41
2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
3.	Defaults on Senior Securities	41
4.	Mine Safety Disclosures	41
5.	Other Information	41
6.	Exhibits	42
	Signatures	43

Precigen®, UltraCAR-T®, RheoSwitch®, UltraVector®, RTS®, UltraPorator®, ActoBiotics® and RheoSwitch Therapeutic System® are our and/or our affiliates' registered trademarks in the United States and GenVec™, AdenoVerse™, ActoBio Therapeutics™, AttSite™, and Precigen Therapeutics™ are our and/or our affiliates' common law trademarks in the United States are our and/or our affiliates' common law trademarks in the United States. This Quarterly Report on Form 10-Q, or Quarterly Report, and the information incorporated herein by reference contain references to trademarks, service marks, and trade names owned by us or other companies. Solely for convenience, trademarks, service marks, and trade names referred to in this Quarterly Report and the information incorporated herein, including logos, artwork, and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks, service marks, and trade names. We do not intend our use or display of other companies' trade names, service marks, or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names, and service marks appearing in this Quarterly Report are the property of their respective owners. Unless the context requires otherwise, references in this Quarterly Report to "Precigen", "we", "us", and "our" refer to Precigen, Inc.

Table of Contents

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which statements involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Quarterly Report, including statements regarding our strategy; future events, including their outcome or timing; future operations; future financial position; future revenue; projected costs; prospects; plans; objectives of management; and expected market growth, are forward-looking statements. The words "aim", "anticipate", "assume", "believe", "continue", "could", "due", "estimate", "expect", "intend", "may", "plan", "positioned", "potential", "predict", "project", "seek", "should", "target", "will", "would", and the negatives of these terms or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements may relate to, among other things: (i) the impact of the COVID-19 pandemic on our clinical trials, businesses, operating results