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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 June 30, 2022
OR
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 July 31, 2022, 208,150,021 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
1.
2.
3.
4.
1.
1A.
2.
3.
4.
5.
6.
Intrexon®, Trans Ova Genetics®, Progentus®, UltraCAR-T®, RheoSwitch®, UltraVector®, RTS®, and RheoSwitch Therapeutic System® are our and/or our affiliates' registered trademarks in the United States and ActoBiotics™, GenVec™, Precigen™, AdenoVerse™, ActoBio Therapeutics™, UltraPorator™, AttSite™, and Precigen Therapeutics™ 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.
2

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, cash flows, and/or financial condition; (ii) the timeliness of regulatory approvals; (iii) our strategy and overall approach to our business model, our efforts to realign our business, and our ability to exercise more control and ownership over the development process and commercialization path; (iv) our ability to successfully enter new markets or develop additional product candidates, including the expected timing and results of investigational studies and preclinical and clinical trials, including any delays or potential delays as a result of the COVID-19 pandemic, whether with our collaborators or independently; (v) our ability to consistently manufacture our product candidates on a timely basis or to establish agreements with third-party manufacturers; (vi) our ability to successfully enter into optimal strategic relationships with our subsidiaries and operating companies that we may form in the future; (vii) our ability to hold or generate significant operating capital, including through partnering, asset sales, and operating cost reductions; (viii) actual or anticipated variations in our operating results; (ix) actual or anticipated fluctuations in competitors' or collaborators' operating results or changes in their respective growth rates; (x) our cash position; (xi) market conditions in our industry; (xii) the volatility of our stock price; (xiii) the ability, and the ability of our collaborators, to protect our intellectual property and other proprietary rights and technologies; (xiv) our ability, and the ability of our collaborators, to adapt to changes in laws or regulations or policies, including federal, state, and local government responses to the COVID-19 pandemic; (xv) outcomes of pending and future litigation; (xvi) the rate and degree of market acceptance of any products developed by us, our subsidiaries, collaborations, or joint ventures, or JVs, and competition from existing technologies and products or new technologies and products that may emerge; (xvii) our ability to retain and recruit key personnel; (xviii) expectations related to the use of proceeds from public offerings and other financing efforts; (xix) estimates regarding expenses, future revenue, capital requirements, and needs for additional financing; (xx) the effects, duration, and severity of the ongoing COVID-19 pandemic and the actions we and others have taken or may take in response; and (xxi) the timing of and the sale of Trans Ova.
Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, and may also concern our expectations relating to our subsidiaries and other affiliates. We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report.
We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report, particularly in Part II, Item 1A, "Risk Factors," that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, JVs, or investments that we may make.
You should read this Quarterly Report, the documents that we reference in this Quarterly Report, our Annual Report on Form 10-K for the year ended December 31, 2021, the other reports we have filed with the Securities and Exchange Commission, or SEC, and the documents that we have filed as exhibits to our filings with the SEC completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
3

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Precigen, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands, except share data)June 30,
2022
December 31,
2021
Assets
Current assets
Cash and cash equivalents$43,844 $36,423 
Short-term investments71,453 72,240 
Receivables
Trade, less allowance for credit losses of $184 as of June 30, 2022 and December 31, 2021
1,307 1,341 
Related parties, less allowance for credit losses of $1,509 as of June 30, 2022 and December 31, 2021
18 73 
Other546 566 
Inventory224 326 
Prepaid expenses and other2,654 5,471 
Current assets held for sale44,573 40,188 
Total current assets164,619 156,628 
Long-term investments11,877 48,562 
Property, plant and equipment, net7,726 8,599 
Intangible assets, net45,933 52,291 
Goodwill36,864 37,554 
Right-of-use assets8,944 9,990 
Other assets921 936 
Noncurrent assets held for sale44,340 45,296 
Total assets$321,224 $359,856 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Table of Contents
Precigen, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited) 
(Amounts in thousands, except share data)June 30,
2022
December 31,
2021
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable$2,668 $3,112 
Accrued compensation and benefits4,864 7,856 
Other accrued liabilities9,666 7,817 
Deferred revenue164 1,490 
Current portion of long-term debt 52 
Current portion of lease liabilities1,033 1,393 
Related party payables58 74 
Current liabilities held for sale11,448 12,851 
Total current liabilities29,901 34,645 
Long-term debt, net of current portion198,674 179,882 
Deferred revenue, net of current portion, including $21,205 from related parties as of June 30, 2022 and December 31, 2021
23,023 23,023 
Lease liabilities, net of current portion8,098 8,747 
Deferred tax liabilities2,260 2,539 
Long-term liabilities held for sale3,615 3,672 
Total liabilities265,571 252,508 
Commitments and contingencies (Note 16)
Shareholders' equity
Common stock, no par value, 400,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 208,150,021 shares and 206,739,874 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
  
Additional paid-in capital1,993,979 2,022,701 
Accumulated deficit(1,933,770)(1,915,556)
Accumulated other comprehensive (loss) income(4,556)203 
Total shareholders' equity55,653 107,348 
Total liabilities and shareholders' equity$321,224 $359,856 
3
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Precigen, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

(Amounts in thousands, except share and per share data)Three Months Ended 
 June 30,
Six Months Ended 
 June 30,
2022202120222021
Revenues
Collaboration and licensing revenues$ $301 $ $367 
Product revenues621 694 1,113 1,306 
Service revenues2,213 2,679 7,146 5,303 
Other revenues77 141 165 274 
Total revenues2,911 3,815 8,424 7,250 
Operating Expenses
Cost of products645 436 1,122 824 
Cost of services1,166 914 2,383 1,888 
Research and development11,954 13,184 23,755 23,321 
Selling, general and administrative12,670 14,954 26,359 29,220 
Impairment of goodwill  482  
Impairment of other noncurrent assets638 543 638 543 
Total operating expenses27,073 30,031 54,739 55,796 
Operating loss(24,162)(26,216)(46,315)(48,546)
Other Expense, Net
Interest expense(2,063)(4,633)(4,101)(9,137)
Interest income37 49 75 81 
Other income (expense), net40 (199)238 (297)
Total other expense, net(1,986)(4,783)(3,788)(9,353)
Equity in net loss of affiliates  (1)(3)
Loss from continuing operations before income taxes(26,148)(30,999)(50,104)(57,902)
Income tax benefit89 60 147 112 
Loss from continuing operations(26,059)(30,939)(49,957)(57,790)
Income from discontinued operations, net of income taxes8,424 10,889 13,071 20,422 
Net loss$(17,635)$(20,050)$(36,886)$(37,368)
Net Loss per Share
Net loss from continuing operations per share, basic and diluted$(0.13)$(0.16)$(0.25)$(0.29)
Net income from discontinued operations per share, basic and diluted0.04 0.06 0.07 0.10 
Net loss per share, basic and diluted$(0.09)$(0.10)$(0.18)$(0.19)
Weighted average shares outstanding, basic and diluted200,461,441 199,021,587 200,047,629 196,275,820 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Precigen, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
 
 Three Months Ended 
 June 30,
Six Months Ended 
 June 30,
(Amounts in thousands)2022202120222021
Net loss$(17,635)$(20,050)$(36,886)$(37,368)
Other comprehensive income (loss):
Unrealized loss on investments(202)(37)(1,004)(85)
Income (loss) on foreign currency translation adjustments(2,655)832 (3,755)(1,371)
Comprehensive loss$(20,492)$(19,255)$(41,645)$(38,824)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Precigen, Inc. and Subsidiaries
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)
 
(Amounts in thousands, except share data)Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Shareholders'
Equity
SharesAmount
Balances at March 31, 2022207,693,277 $ $1,991,670 $(1,699)$(1,916,135)$73,836 
Stock-based compensation expense— — 2,309 — — 2,309 
Shares issued for accrued compensation456,744 —  — —  
Net loss— — — — (17,635)(17,635)
Other comprehensive loss— — — (2,857)— (2,857)
Balances at June 30, 2022208,150,021 $ $1,993,979 $(4,556)$(1,933,770)$55,653 
(Amounts in thousands, except share data)Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
Shareholders'
Equity
SharesAmount
Balances at March 31, 2021206,414,135 $ $2,013,757 $1,746 $(1,840,708)$174,795 
Stock-based compensation expense— — 3,557 — — 3,557 
Shares issued upon vesting of restricted stock units and for exercises of stock options166,793 — 99 — — 99 
Net loss— — — — (20,050)(20,050)
Other comprehensive income— — — 795 — 795 
Balances at June 30, 2021206,580,928 $ $2,017,413 $2,541 $(1,860,758)$159,196 
The accompanying notes are an integral part of these condensed consolidated financial statements.








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Precigen, Inc. and Subsidiaries
Condensed Consolidated Statements of Shareholders' Equity
(Unaudited)

(Amounts in thousands, except share data)Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Shareholders'
Equity
SharesAmount
Balances at December 31, 2021206,739,874 $ $2,022,701 $203 $(1,915,556)$107,348 
Cumulative effect of adoption of ASU 2020-06— — (36,868)— 18,672 (18,196)
Stock-based compensation expense— — 5,871 — — 5,871 
Shares issued upon vesting of restricted stock units and for exercises of stock options354,089 — 1 — — 1 
Shares issued for accrued compensation772,071 — 1,698 — — 1,698 
Shares issued as payment for services283,987 — 576 — — 576 
Net loss— — — — (36,886)(36,886)
Other comprehensive loss— — — (4,759)— (4,759)
Balances at June 30, 2022208,150,021 $ $1,993,979 $(4,556)$(1,933,770)$55,653 
(Amounts in thousands, except share data)Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Income
Accumulated
Deficit
Total
Shareholders'
Equity
SharesAmount
Balances at December 31, 2020187,663,207 $ $1,886,567 $3,997 $(1,823,390)$67,174 
Stock-based compensation expense— — 8,972 — — 8,972 
Shares issued upon vesting of restricted stock units and for exercises of stock options1,592,950 — 252 — — 252 
Shares issued as payment for services74,771 — 577 — — 577 
Shares issued in public offerings, net of issuance costs17,250,000 — 121,045 — — 121,045 
Net loss— — — — (37,368)(37,368)
Other comprehensive loss— — — (1,456)— (1,456)
Balances at June 30, 2021206,580,928 $ $2,017,413 $2,541 $(1,860,758)$159,196 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Precigen, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Six Months Ended 
 June 30,
(Amounts in thousands)20222021
Cash flows from operating activities
Net loss$(36,886)$(37,368)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization6,518 7,043 
Loss (gain) on disposals of assets, net360 (229)
Impairment of goodwill482  
Impairment of other noncurrent assets638 543 
Amortization of premiums on investments, net468 498 
Equity in net loss of affiliates1 3 
Stock-based compensation expense5,871 8,972 
Shares issued as payment for services576 577 
Provision for credit losses735 645 
Accretion of debt discount and amortization of deferred financing costs596 5,630 
Deferred income taxes(112)(119)
Noncash gain on termination of operating leases (4,602)
Other noncash items105 1 
Changes in operating assets and liabilities:
Receivables:
Trade(7,071)(10,581)
Related parties55 (3)
Other10 (403)
Inventory769 (54)
Prepaid expenses and other3,515 3,794 
Other assets2 205 
Accounts payable(963)522 
Accrued compensation and benefits(1,015)(627)
Other accrued liabilities1,862 813 
Deferred revenue(2,184)482 
Lease liabilities(40)145 
Related party payables(78)3 
Other long-term liabilities(50)(50)
Net cash used in operating activities(25,836)(24,160)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Precigen, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)

 Six Months Ended 
 June 30,
(Amounts in thousands)20222021
Cash flows from investing activities
Purchases of investments$ $(174,221)
Sales and maturities of investments36,000 58,000 
Purchases of property, plant and equipment(3,297)(2,208)
Proceeds from sale of assets438 2,258 
Proceeds from repayment of notes receivable 3,689 
Net cash provided by (used in) investing activities33,141 (112,482)
Cash flows from financing activities
Proceeds from issuance of shares, net of issuance costs 121,045 
Payments of long-term debt(277)(234)
Proceeds from stock option exercises1 252 
Net cash (used in) provided by financing activities(276)121,063 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(471)184 
Net increase (decrease) in cash, cash equivalents, and restricted cash6,558 (15,395)
Cash, cash equivalents, and restricted cash
Beginning of period43,343 52,250 
End of period$49,901 $36,855 
Supplemental disclosure of cash flow information
Cash paid during the period for interest$3,568 $3,578 
Cash paid during the period for income taxes 4 
Significant noncash activities
Accrued compensation paid in equity awards$1,698 $ 
Purchases of property and equipment included in accounts payable and other accrued liabilities234 201 
Proceeds from sale of assets included in accounts receivable147 99 
The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of June 30, 2022 and December 31, 2021 as shown above:
June 30,
2022
December 31,
2021
Cash and cash equivalents$43,844 $36,423 
Cash and cash equivalents included in current assets held for sale5,667 6,497 
Restricted cash included in other assets390 423 
Cash, cash equivalents, and restricted cash$49,901 $43,343 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Precigen, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(Amounts in thousands, except share and per share data)
1. Organization
Precigen, Inc. ("Precigen"), a Virginia corporation, is a synthetic biology company with an increasing focus on its discovery and clinical stage activities to advance the next generation of gene and cellular therapies to target the most urgent and intractable challenges in immuno-oncology, autoimmune disorders, and infectious diseases. Precigen operates through the following subsidiaries:
PGEN Therapeutics, Inc. ("PGEN Therapeutics") is a dedicated discovery and clinical stage biopharmaceutical company advancing the next generation of gene and cell therapies using precision technology to target urgent and intractable diseases in immuno-oncology, autoimmune disorders, and infectious diseases. PGEN Therapeutics is a wholly owned subsidiary of Precigen with primary operations in Maryland.
Precigen ActoBio, Inc. ("ActoBio") is pioneering a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics and is a wholly owned subsidiary of Precigen with primary operations in Belgium.
Exemplar Genetics, LLC, doing business as Precigen Exemplar ("Exemplar"), is committed to enabling the study of life-threatening human diseases through the development of MiniSwine Yucatan miniature pig research models and services, as well as enabling the production of cells and organs in its genetically engineered swine for regenerative medicine applications and is a wholly owned subsidiary of Precigen with primary operations in Iowa.
Effective October 1, 2019, Precigen transferred substantially all of its proprietary methane bioconversion platform ("MBP") assets to a wholly owned subsidiary, MBP Titan LLC ("MBP Titan"). MBP Titan's proprietary technology is designed to convert natural gas into more valuable and usable energy and chemical products through novel, highly engineered bacteria that utilize specific energy feedstocks. Prior to October 1, 2019, the operation transferred to MBP Titan was an operating division within Precigen. Beginning in the second quarter of 2020, the Company suspended MBP Titan's operations and began the process to wind down MBP Titan's activities and had substantially completed the wind down by December 31, 2020, with the final disposition of certain property and equipment and the facility operating lease occurring in January 2021. With the exception of certain assets and obligations with which the Company has a continuing involvement after the wind down, MBP Titan has been presented as discontinued operations for all periods presented. See Note 3 for further discussion.
On July 1, 2022, Precigen entered into a definitive agreement (the “Purchase Agreement”) for the sale of 100% of the membership interests in its wholly-owned subsidiary, Trans Ova Genetics, L.C. (“Trans Ova”), a provider of reproductive technologies, including services and products sold to cattle breeders and other producers. Consummation of this transaction, anticipated in the third quarter of 2022, is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). The accompanying condensed consolidated financial statements for all periods presented reflect the Trans Ova business as discontinued operations. See Note 3 for further discussion. Trans Ova was formerly a separate reportable segment.

Precigen and its consolidated subsidiaries are hereinafter referred to as the "Company."
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Certain information and footnote disclosures normally included in the Company's annual financial statements have been condensed or omitted. These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for fair statement of the Company's financial position as of June 30, 2022 and results of operations and cash flows for the interim periods ended June 30, 2022 and 2021. The year-end condensed consolidated balance sheet data was derived from the Company's audited financial statements but does not include all disclosures required by U.S. GAAP. These interim financial
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results are not necessarily indicative of the results to be expected for the year ending December 31, 2022, or for any other future annual or interim period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.
The accompanying condensed consolidated financial statements reflect the operations of Precigen and its subsidiaries. All intercompany accounts and transactions have been eliminated.
Liquidity
Management believes that existing liquid assets as of June 30, 2022, as well as expected proceeds from the sale of Trans Ova (see Note 3), will allow the Company to continue its operations for at least a year from the issuance date of these condensed consolidated financial statements. The Company is subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of therapeutic product candidates. Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies, and the technical risks associated with the successful research, development, and clinical manufacturing of its therapeutic product candidates. Additionally, the accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the six months ended June 30, 2022, the Company incurred a net loss of $36,886 and, as of June 30, 2022, had an accumulated deficit of $1,933,770. Management expects operating losses and negative cash flows to continue for the foreseeable future and, as a result, the Company will require additional capital to fund its operations and execute its business plan. In the absence of a significant source of recurring revenue, the Company's long-term success is dependent upon its ability to continue to raise additional capital in order to fund ongoing research and development (which could occur through debt or equity issuances, sales or partnerships of non-core assets, collaborations or licensing of core or non-core assets, or other transactions), adequately satisfy or renegotiate long-term debt obligations, obtain regulatory approval of its therapeutic product candidates, successfully commercialize its therapeutic product candidates, generate revenue, meet its obligations and, ultimately, attain profitable operations.
Risks and Uncertainties
COVID-19 has had and continues to have an extensive impact on the global health and economic environments. Furthermore, there is uncertainty regarding the duration and severity of the ongoing pandemic, and the Company could experience delays or other pandemic-related events that may adversely impact the Company's clinical as well as preclinical pipeline candidates in the future.
The Company is closely monitoring the impact of COVID-19 on all aspects of its businesses. Given the dynamic nature of these circumstances, the full impact of the COVID-19 pandemic on the Company's ongoing business, results of operations, and overall financial performance in future periods cannot be reasonably estimated at this time, and it could have a material adverse effect on the Company's results of operations, cash flows, and financial position, including resulting impairments to goodwill and long-lived assets and additional credit losses.
See Note 3 for further discussion of the impact of COVID-19 on MBP Titan.
Equity Method Investments
The Company accounts for its investments in each of its joint ventures ("JVs") using the equity method of accounting based upon relative ownership interest. See additional discussion related to certain of the Company's JVs in Note 4.
Variable Interest Entities
As of June 30, 2022 and December 31, 2021, the Company determined that its JVs were variable interest entities ("VIEs"). The Company was not the primary beneficiary for these entities since it did not have the power to direct the activities that most significantly impact the economic performance of the VIEs. As of June 30, 2022 and December 31, 2021, the Company had no risk of loss related to the identified VIEs. See Note 4 for discussion of the Company's future funding commitments for its significant JVs.
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Net Loss per Share
Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, using the treasury-stock method. For purposes of the diluted net loss per share calculation, shares to be issued pursuant to convertible debt, stock options, RSUs, and warrants are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and, therefore, basic and diluted net loss per share were the same for all periods presented.
The following potentially dilutive securities as of June 30, 2022 and 2021, have been excluded from the above computations of diluted weighted average shares outstanding for the three and six months then ended as they would have been anti-dilutive:
June 30,
20222021
Convertible debt11,732,440 11,732,440 
Options15,492,339 12,660,387 
Restricted stock units714,687 554,146 
Warrants121,888 121,888 
Total28,061,354 25,068,861 
Segment Information
The Company's chief operating decision maker ("CODM") regularly reviews disaggregated financial information for various operating segments. The financial information regularly reviewed by the CODM and the operating segments, which were determined to be operating and reportable segments, are (i) Biopharmaceuticals and (ii) Exemplar. The Biopharmaceuticals reportable segment is primarily comprised of the Company's legal entities of PGEN Therapeutics and ActoBio. All of Precigen's consolidated subsidiaries and operating divisions that did not meet the quantitative thresholds to report separately are combined and reported in a single category, All Other. See Note 1 for a description of PGEN Therapeutics, ActoBio, and Exemplar. Corporate expenses, which are not allocated to the segments and are managed at a consolidated level, include costs associated with general and administrative functions, including the Company's finance, accounting, legal, human resources, information technology, business development, and investor relations functions. Corporate expenses exclude interest expense, depreciation and amortization, gain or loss on disposals of assets, stock-based compensation expense, loss on settlement agreement, and equity in net loss of affiliates and include unrealized and realized gains and losses on the Company's securities portfolio. The Company's segment presentation excludes amounts related to the operations of Trans Ova and MBP Titan which are reported as discontinued operations (Note 3). See Note 18 for further discussion of the Company's segments.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. The new guidance also requires the if-converted method to be applied for all convertible instruments.
We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective transition method, which resulted in an increase to our reported long-term debt outstanding, net of current portion, of $18,196, a decrease to our additional paid-in capital of $36,868, and a corresponding cumulative-effect reduction to our opening accumulated deficit of $18,672. The adoption of ASU
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2020-06 is expected to reduce non-cash interest expense related to existing convertible debt outstanding by approximately $11,800 for the year ending December 31, 2022, and did not have an impact on our consolidated cash flows. The use of the if-converted method did not have an impact on our overall earnings per share calculation.
Recently Issued Accounting Pronouncements Not Yet Adopted
There are no accounting standards which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures.
3. Discontinued Operations
Where applicable, the notes to the accompanying condensed consolidated financial statements have been updated to reflect information pertaining to the Company's continuing operations based on the discontinued operations summarized below.
Trans Ova
As part of the Company's strategic shift to becoming a primarily healthcare company, as discussed in Note 1, on July 1, 2022, the Company entered into a Purchase Agreement for the sale of 100% of the membership interests in its wholly-owned subsidiary, Trans Ova, to Spring Bidco LLC, a Delaware limited liability company (the “Buyer”), for $170,000 payable at the closing of the transaction (plus the cash balance of Trans Ova at the date of closing, less the debt balance of Trans Ova at the date of closing, and subject to a net working capital adjustment mechanism) and up to $10,000 in cash earn - out payments contingent upon the performance of Trans Ova in 2022 and 2023 (the “Transaction”). In connection with the Transaction, the Company will hold a total of $200,000, comprising the purchase price and additional funds provided by the Company, in a segregated account and will use such funds for certain permitted purposes, including resolution of the Company’s outstanding convertible bonds described in Note 11. The board of directors of the Company approved the sale in June 2022. In addition, the Company is required to indemnify the Buyer for certain expenses incurred post close, if incurred, in amounts not to exceed $5,750.

The Purchase Agreement contains representations and warranties, and covenants customary for a transaction of this nature. The consummation of the Transaction is subject to customary closing conditions, including (among others) the expiration or termination of any applicable waiting period under the HSR Act with respect to the Transaction, the absence of an injunction or order of any court of competent jurisdiction in the United States enjoining, prohibiting or rendering illegal the consummation of the Transaction, the absence of any material adverse effect on the business, assets, results of operations or condition of Trans Ova and its subsidiaries, the accuracy of the representations and warranties of each party (subject to materiality qualifiers) and the compliance by each party with its covenants in all material respects. The Transaction is currently expected to close in the third quarter of 2022.

The Purchase Agreement contains certain termination rights for the Company and Buyer, including, among other events, (1) if the Transaction has not been completed on or prior to July 1, 2023, (2) if the closing of the Transaction would violate any non-appealable, final injunction or order of any court of competent jurisdiction in the United States or (3) following a breach by the other party that would cause certain closing conditions not to be satisfied and is not or cannot be cured within 45 days’ notice of such breach. If the Purchase Agreement is terminated under certain circumstances relating to the failure of the expiration or termination of the applicable waiting period under the HSR Act to occur, Buyer is obligated pay a termination fee of $12,750 to the Company.





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The carrying values of the major classes of assets and liabilities included in assets and liabilities held for sale related to Trans Ova as of June 30, 2022 and December 31, 2021, are as follows:
June 30,
2022
December 31,
2021
Assets
Cash and cash equivalents$5,667 $6,497 
Trade receivables, net26,020 19,491 
Inventory12,262 12,935 
Other current assets624 1,265 
Property, plant and equipment, net25,507 25,716 
Intangible assets, net736 1,824 
Goodwill16,594 16,594 
Right-of-use assets1,321 910 
Other noncurrent assets182 252 
Total assets held for sale$88,913 $85,484 
Liabilities
  Accounts payable$1,332 $2,293 
  Accrued compensation and benefits3,632 3,367 
  Other accrued liabilities3,764 3,778 
  Deferred revenue2,080 2,952 
  Current portion of long-term debt359 350 
Other current liabilities281 111 
Long-term debt, net of current portion2,633 2,867 
Other long-term liabilities982 805 
Total liabilities held for sale$15,063 $16,523 
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The following table presents the financial results of discontinued operations related to Trans Ova for the for the three and six months ended June 30, 2022 and 2021:
Three Months Ended 
 June 30,
Six Months Ended 
 June 30,
2022202120222021
Product revenues$8,940 $7,641 $17,172 $13,410 
Service revenues23,501 22,124 41,777 37,431 
Total revenues32,441 29,765 58,949 50,841 
Cost of products7,438 5,699 14,471 10,885 
Cost of services9,977 7,984 18,349 14,412 
Research and development908 497 1,867 881 
Selling, general and administrative6,124 5,043 12,011 9,479 
Total operating expenses24,447 19,223 46,698 35,657 
       Operating income7,994 10,542 12,251 15,184 
Other income, net430 334 820 699 
Income from discontinued operations$8,424 $10,876 $13,071 $15,883 
The following table presents the significant noncash items, purchases of property, plant and equipment, and proceeds from sales of assets for the discontinued operations related to Trans Ova that are included in the accompanying condensed consolidated statements of cash flow:
Six Months Ended 
 June 30,
20222021
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization$2,765 $2,898 
Loss on disposal of assets360 242 
Stock-based compensation expense68 204 
Provision for credit losses735 645 
Cash flows from investing activities
Purchases of property, plant and equipment(2,629)(