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,~~June 30, 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,~~July 31, 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.	Item No.		Page	Item No.		Page
PART I - FINANCIAL INFORMATION	PART I - FINANCIAL INFORMATION			PART I - FINANCIAL INFORMATION
1.	1.	Condensed Consolidated Financial Statements (unaudited):	4	1.	Condensed Consolidated Financial Statements (unaudited):	4
		Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	4		Condensed Consolidated Balance Sheets as of June 3 0 , 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 Operations for the Three and Six Months Ended June 3 0 , 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 Comprehensive Loss for the Three and Si x Months Ended June 3 0 , 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 Shareholders' Equity for the Three and Six Months Ended June 3 0 , 2023 and 2022	8
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	9		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2023 and 2022	10
		Notes to the Condensed Consolidated Financial Statements	11		Notes to the Condensed Consolidated Financial Statements	12
2.	2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29	2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
3.	3.	Quantitative and Qualitative Disclosures About Market Risk	39	3.	Quantitative and Qualitative Disclosures About Market Risk	41
4.	4.	Controls and Procedures	40	4.	Controls and Procedures	42

PART II - OTHER INFORMATION	PART II - OTHER INFORMATION			PART II - OTHER INFORMATION
1.	1.	Legal Proceedings	41	1.	Legal Proceedings	43
1A.	1A.	Risk Factors	41	1A.	Risk Factors	43
2.	2.	Unregistered Sales of Equity Securities and Use of Proceeds	41	2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
3.	3.	Defaults on Senior Securities	41	3.	Defaults on Senior Securities	43
4.	4.	Mine Safety Disclosures	41	4.	Mine Safety Disclosures	43
5.	5.	Other Information	41	5.	Other Information	43
6.	6.	Exhibits	42	6.	Exhibits	44
		Signatures	43		Signatures	45

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.

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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)~~(ii) 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)~~(iii) 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, whether with our collaborators or independently; ~~(v)~~(iv) our ability to consistently manufacture our product candidates on a timely basis or to establish agreements with third-party manufacturers; ~~(vi)~~(v) our ability to successfully enter into optimal strategic relationships with our subsidiaries and operating companies that we may form in the future; ~~(vii)~~(vi) our ability to hold or generate significant operating capital, including through partnering, asset sales, and operating cost reductions; ~~(viii)~~(vii) actual or anticipated variations in our operating results; ~~(ix)~~(viii) actual or anticipated fluctuations in competitors' or collaborators' operating results or changes in their respective growth rates; ~~(x)~~(ix) our cash position; ~~(xi)~~(x) market conditions in our industry; ~~(xii)~~(xi) the volatility of our stock price; ~~(xiii)~~(xii) the ability, and the ability of our collaborators, to protect our intellectual property and other proprietary rights and technologies; ~~(xiv)~~(xiii) outcomes of pending and future litigation; ~~(xv)~~(xiv) 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; ~~(xvi)~~(xv) our ability to retain and recruit key personnel; ~~(xvii)~~(xvi) expectations related to the use of proceeds from public offerings and other financing efforts; and ~~(xviii)~~(xvii) estimates regarding expenses, future revenue, capital requirements, and needs for additional financing.

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, 2022, 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.

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)	(Amounts in thousands, except share data)	March 31, 2023		December 31, 2022		(Amounts in thousands, except share data)	June 30, 2023		December 31, 2022
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	9,740	$	4,858	Cash and cash equivalents	$	16,546	$	4,858
Restricted cash	Restricted cash	13,800		43,339		Restricted cash	—		43,339
Short-term investments	Short-term investments	94,351		51,092		Short-term investments	71,888		51,092

Receivables	Receivables					Receivables
Trade, less allowance for credit losses of $184 as of March 31, 2023 and December 31, 2022, respectively		1,771		978
Trade, less allowance for credit losses of $184 as of both June 30, 2023 and December 31, 2022						Trade, less allowance for credit losses of $184 as of both June 30, 2023 and December 31, 2022	1,354		978

Other	Other	13,751		12,826		Other	13,052		12,826

Prepaid expenses and other	Prepaid expenses and other	4,330		5,066		Prepaid expenses and other	2,792		5,066

Total current assets	Total current assets	137,743		118,159		Total current assets	105,632		118,159
Long-term investments	Long-term investments	7,460		—		Long-term investments	7,127		—

Property, plant and equipment, net	Property, plant and equipment, net	6,908		7,329		Property, plant and equipment, net	6,574		7,329
Intangible assets, net	Intangible assets, net	43,848		44,455		Intangible assets, net	42,656		44,455
Goodwill	Goodwill	36,966		36,923		Goodwill	36,966		36,923

Right-of-use assets	Right-of-use assets	7,617		8,086		Right-of-use assets	7,623		8,086
Other assets	Other assets	1,004		1,025		Other assets	949		1,025
Total assets	Total assets	$	241,546	$	215,977	Total assets	$	207,527	$	215,977

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Precigen, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)


(Amounts in thousands, except share data)	(Amounts in thousands, except share data)	March 31, 2023		December 31, 2022		(Amounts in thousands, except share data)	June 30, 2023		December 31, 2022
Liabilities and Shareholders' Equity	Liabilities and Shareholders' Equity					Liabilities and Shareholders' Equity
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	3,809	$	4,068	Accounts payable	$	2,510	$	4,068
Accrued compensation and benefits	Accrued compensation and benefits	4,959		6,377		Accrued compensation and benefits	4,820		6,377
Other accrued liabilities	Other accrued liabilities	22,887		23,747		Other accrued liabilities	3,257		4,997
Settlement and Indemnification Accruals						Settlement and Indemnification Accruals	18,750		18,750
Deferred revenue	Deferred revenue	15		25		Deferred revenue	15		25

Current portion of long-term debt	Current portion of long-term debt	13,819		43,219		Current portion of long-term debt	—		43,219

Current portion of lease liabilities	Current portion of lease liabilities	1,244		1,209		Current portion of lease liabilities	1,421		1,209

Total current liabilities	Total current liabilities	46,733		78,645		Total current liabilities	30,773		78,645

Deferred revenue, net of current portion	Deferred revenue, net of current portion	1,818		1,818		Deferred revenue, net of current portion	1,818		1,818
Lease liabilities, net of current portion	Lease liabilities, net of current portion	6,623		6,992		Lease liabilities, net of current portion	6,545		6,992
Deferred tax liabilities	Deferred tax liabilities	2,239		2,263		Deferred tax liabilities	2,181		2,263

Total liabilities	Total liabilities	57,413		89,718		Total liabilities	41,317		89,718
Commitments and contingencies (Note 14)	Commitments and contingencies (Note 14)					Commitments and contingencies (Note 14)
Shareholders' equity	Shareholders' equity					Shareholders' equity
Common stock, no par value, 400,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 255,482,753 shares and 208,150,021 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		—		—
Common stock, no par value, 400,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 255,482,753 shares and 208,150,021 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively						Common stock, no par value, 400,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 255,482,753 shares and 208,150,021 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	—		—
Additional paid-in capital	Additional paid-in capital	2,078,133		1,998,314		Additional paid-in capital	2,080,348		1,998,314
Accumulated deficit	Accumulated deficit	(1,891,301)		(1,868,567)		Accumulated deficit	(1,911,620)		(1,868,567)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(2,699)		(3,488)		Accumulated other comprehensive loss	(2,518)		(3,488)
Total shareholders' equity	Total shareholders' equity	184,133		126,259		Total shareholders' equity	166,210		126,259

Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	241,546	$	215,977	Total liabilities and shareholders' equity	$	207,527	$	215,977

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)	(Amounts in thousands, except share and per share data)	Three Months Ended March 31,				(Amounts in thousands, except share and per share data)	Three Months Ended June 30,						Six Months Ended June 30,
		2023		2022				(Amounts in thousands, except share and per share data)	2023			2022			2023			2022
Revenues	Revenues

Product revenues	Product revenues	$	324	$	492				Product revenues	$	324		$	621		648			1,113
Service revenues	Service revenues	1,527		4,933					Service revenues	1,438			2,213			2,965			7,146
Other revenues	Other revenues	—		88					Other revenues	5			77			5			165
Total revenues	Total revenues	1,851		5,513					Total revenues	1,767			2,911			3,618			8,424
Operating Expenses	Operating Expenses								Operating Expenses

Cost of products and services	Cost of products and services	1,527		1,694					Cost of products and services	1,697			1,811			3,224			3,505
Research and development	Research and development	12,163		11,801					Research and development	11,874			11,954			24,037			23,755
Selling, general and administrative	Selling, general and administrative	11,639		13,689					Selling, general and administrative	9,316			12,670			20,954			26,359
Impairment of goodwill	Impairment of goodwill	—		482					Impairment of goodwill	—			—			—			482

Impairment of other noncurrent assets									Impairment of other noncurrent assets	—			638			—			638
Total operating expenses	Total operating expenses	25,329		27,666					Total operating expenses	22,887			27,073			48,215			54,739
Operating loss	Operating loss	(23,478)		(22,153)					Operating loss	(21,120)			(24,162)			(44,597)			(46,315)
Other income (Expense), Net	Other income (Expense), Net								Other income (Expense), Net

Interest expense	Interest expense	(324)		(2,038)					Interest expense	(136)			(2,063)			(460)			(4,101)
Interest income	Interest income	633		38					Interest income	828			37			1,460			75
Other income, net	Other income, net	380		198					Other income, net	44			40			424			238
Total other income (expense), net	Total other income (expense), net	689		(1,802)					Total other income (expense), net	736			(1,986)			1,424			(3,788)
Equity in net loss of affiliates	Equity in net loss of affiliates	—		(1)					Equity in net loss of affiliates	—			—			—			(1)
Loss from continuing operations before income taxes	Loss from continuing operations before income taxes	(22,789)		(23,956)					Loss from continuing operations before income taxes	(20,384)			(26,148)			(43,173)			(50,104)
Income tax benefit	Income tax benefit	55		58					Income tax benefit	65			89			120			147
Loss from continuing operations	Loss from continuing operations	(22,734)		(23,898)					Loss from continuing operations	(20,319)			(26,059)			(43,053)			(49,957)
Income from discontinued operations, net of income taxes	Income from discontinued operations, net of income taxes	—		4,647					Income from discontinued operations, net of income taxes	—			8,424			—			13,071
Net loss	Net loss	$	(22,734)	$	(19,251)				Net loss	$	(20,319)		$	(17,635)		$	(43,053)		$	(36,886)

Net Loss per Share	Net Loss per Share								Net Loss per Share
Net loss from continuing operations per share, basic and diluted	Net loss from continuing operations per share, basic and diluted	$	(0.10)	$	(0.12)				Net loss from continuing operations per share, basic and diluted	$	(0.08)		$	(0.13)		$	(0.18)		$	(0.25)
Net income from discontinued operations per share, basic and diluted	Net income from discontinued operations per share, basic and diluted	—		0.02					Net income from discontinued operations per share, basic and diluted	—			0.04			—			0.07
Net loss per share, basic and diluted	Net loss per share, basic and diluted	$	(0.10)	$	(0.10)				Net loss per share, basic and diluted	$	(0.08)		$	(0.09)		$	(0.18)		$	(0.18)
Weighted average shares outstanding, basic and diluted	Weighted average shares outstanding, basic and diluted	229,770,381		199,629,218					Weighted average shares outstanding, basic and diluted	248,003,322			200,461,441			240,307,403			200,047,629

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 March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	(Amounts in thousands)	2023		2022			(Amounts in thousands)	2023		2022		2023		2022
Net loss	Net loss	$	(22,734)	$	(19,251)		Net loss	$	(20,319)	$	(17,635)	$	(43,053)	$	(36,886)
Other comprehensive income (loss):	Other comprehensive income (loss):						Other comprehensive income (loss):
Unrealized gain (loss) on investments	Unrealized gain (loss) on investments	262		(802)			Unrealized gain (loss) on investments	228		(202)		491		(1,004)
Gain (loss) on foreign currency translation adjustments	Gain (loss) on foreign currency translation adjustments	527		(1,100)			Gain (loss) on foreign currency translation adjustments	(47)		(2,655)		479		(3,755)

Comprehensive loss	Comprehensive loss	$	(21,945)	$	(21,153)		Comprehensive loss	$	(20,138)	$	(20,492)	$	(42,083)	$	(41,645)

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)	(Amounts in thousands, except share data)	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit				Total Shareholders' Equity							(Amounts in thousands, except share data)		Common Stock					Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Shareholders' Equity
		Shares	Amount										(Amounts in thousands, except share data)	Shares				Amount			Additional Paid-in Capital
Balances at December 31, 2022		208,150,021	$	—			$	1,998,314						$			(3,488)		$	(1,868,567)				$	126,259
Balances at March 31, 2023																							Balances at March 31, 2023		255,482,753		$	—		$	2,078,133		$	(2,699)		$	(1,891,301)		$	184,133

Stock-based compensation expense	Stock-based compensation expense	—	—		3,131				—		—				3,131							Stock-based compensation expense		—		—			2,188			—			—			2,188
Shares issued upon vesting of restricted stock units and for exercises of stock options		697,815	—		—				—		—				—
Shares issued for accrued compensation		2,206,469	—		3,361				—		—				3,361
Shares issued as payment for services		465,808	—		545				—		—				545
Shares issued in public offering, net of issuance costs		43,962,640	—		72,782				—		—				72,782

Other																						Other		—		—			27			—			—			27

Net loss	Net loss	—	—		—				—		(22,734)				(22,734)							Net loss		—		—			—			—			(20,319)			(20,319)

Other comprehensive income	Other comprehensive income	—	—		—				789		—				789							Other comprehensive income		—		—			—			181			—			181
Balances at March 31, 2023		255,482,753	$	—	$	2,078,133			$	(2,699)	$	(1,891,301)			$	184,133
Balances at June 30, 2023																						Balances at June 30, 2023		255,482,753		$	—		$	2,080,348		$	(2,518)		$	(1,911,620)		$	166,210


(Amounts in thousands, except share data)	(Amounts in thousands, except share data)	Common Stock			Additional Paid-in Capital				Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit				Total Shareholders' Equity							(Amounts in thousands, except share data)	Common Stock				Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Shareholders' Equity
		Shares	Amount										(Amounts in thousands, except share data)	Shares				Amount			Additional Paid-in Capital
Balances at December 31, 2021		206,739,874	$	—			$	2,022,701						$			203		$	(1,915,556)			$	107,348
Cumulative effect of adoption of ASU 2020-06		—			(36,868)				—		18,672				(18,196)
Balances at March 31, 2022																						Balances at March 31, 2022	207,693,277		$	—	$	1,991,670	$	(1,699)	$	(1,916,135)	$	73,836

Stock-based compensation expense	Stock-based compensation expense	—	—		3,562				—		—				3,562							Stock-based compensation expense	—		—		2,309		—		—		2,309
Shares issued upon vesting of restricted stock units and for exercises of stock options		354,089	—		1				—		—				1

Shares issued for accrued compensation	Shares issued for accrued compensation	315,327	—		1,698				—		—				1,698							Shares issued for accrued compensation	456,744		—		—		—		—		—
Shares issued as payment for services		283,987	—		576				—		—				576

Noncash dividend		—	—		—				—		—				—

Net loss	Net loss	—	—		—				—		(19,251)				(19,251)							Net loss	—		—		—		—		(17,635)		(17,635)

Other comprehensive loss	Other comprehensive loss	—	—		—				(1,902)		—				(1,902)							Other comprehensive loss	—		—		—		(2,857)		—		(2,857)
Balances at March 31, 2022		207,693,277	$	—	$	1,991,670			$	(1,699)	$	(1,916,135)			$	73,836
Balances at June 30, 2022																						Balances at June 30, 2022	208,150,021		$	—	$	1,993,979	$	(4,556)	$	(1,933,770)	$	55,653

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 Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Balances at December 31, 2022	208,150,021	$	—	$	1,998,314	$	(3,488)	$	(1,868,567)	$	126,259

Stock-based compensation expense	—	—		5,320		—		—		5,320
Shares issued upon vesting of restricted stock units and for exercises of stock options	697,815	—		—		—		—		—
Shares issued for accrued compensation	2,206,469	—		3,361		—		—		3,361
Shares issued as payment for services	465,808	—		545		—		—		545
Shares issued in public offering, net of issuance costs	43,962,640	—		72,808		—		—		72,808












Net loss	—	—		—		—		(43,053)		(43,053)

Other comprehensive income	—	—		—		970		—		970
Balances at June 30, 2023	255,482,753	$	—	$	2,080,348	$	(2,518)	$	(1,911,620)	$	166,210


(Amounts in thousands, except share data)	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Shareholders' Equity
	Shares	Amount
Balances at December 31, 2021	206,739,874	$	—	$	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 options	354,089	—		1		—		—		1
Shares issued for accrued compensation	772,071	—		1,698		—		—		1,698
Shares issued as payment for services	283,987	—		576		—		—		576













Net loss	—	—		—		—		(36,886)		(36,886)

Other comprehensive loss	—	—		—		(4,759)		—		(4,759)
Balances at June 30, 2022	208,150,021	—		$	1,993,979	$	(4,556)	$	(1,933,770)	$	55,653

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Precigen, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


		Three Months Ended March 31,					Six Months Ended June 30,
(Amounts in thousands)	(Amounts in thousands)	2023		2022		(Amounts in thousands)	2023		2022
Cash flows from operating activities	Cash flows from operating activities					Cash flows from operating activities
Net loss	Net loss	$	(22,734)	$	(19,251)	Net loss	$	(43,053)	$	(36,886)
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:					Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	1,711		3,292		Depreciation and amortization	3,404		6,518
Loss on disposals of assets, net		—		125
(Gain) Loss on disposals of assets, net						(Gain) Loss on disposals of assets, net	(40)		360
Impairment of goodwill	Impairment of goodwill	—		482		Impairment of goodwill	—		482

Impairment of other noncurrent assets						Impairment of other noncurrent assets	—		638

Gain on debt retirement	Gain on debt retirement	(106)		—		Gain on debt retirement	(60)		—

Amortization of (discounts) premiums on investments, net	Amortization of (discounts) premiums on investments, net	(203)		265		Amortization of (discounts) premiums on investments, net	(721)		468
Equity in net loss of affiliates	Equity in net loss of affiliates	—		1		Equity in net loss of affiliates	—		1
Stock-based compensation expense	Stock-based compensation expense	3,131		3,562		Stock-based compensation expense	5,320		5,871
Shares issued as payment for services	Shares issued as payment for services	545		576		Shares issued as payment for services	545		576
Provision for credit losses	Provision for credit losses	—		334		Provision for credit losses	—		735
Accretion of debt discount and amortization of deferred financing costs	Accretion of debt discount and amortization of deferred financing costs	34		284		Accretion of debt discount and amortization of deferred financing costs	60		596
Deferred income taxes	Deferred income taxes	(55)		(58)		Deferred income taxes	(113)		(112)

Other noncash items						Other noncash items	1		105
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables:	Receivables:					Receivables:
Trade	Trade	(793)		(3,638)		Trade	(376)		(7,016)

Other	Other	(925)		21		Other	(226)		10

Prepaid expenses and other	Prepaid expenses and other	743		2,102		Prepaid expenses and other	2,274		4,284
Other assets	Other assets	(27)		42		Other assets	83		2
Accounts payable	Accounts payable	(249)		(588)		Accounts payable	(1,537)		(963)
Accrued compensation and benefits	Accrued compensation and benefits	1,936		(3,462)		Accrued compensation and benefits	1,804		(1,015)
Other accrued liabilities	Other accrued liabilities	(1,597)		(1,086)		Other accrued liabilities	(1,740)		1,862
Deferred revenue	Deferred revenue	22		(1,767)		Deferred revenue	(10)		(2,184)
Lease liabilities	Lease liabilities	195		(18)		Lease liabilities	229		(40)
Related party payables	Related party payables	—		(1)		Related party payables	—		(78)
Other long-term liabilities	Other long-term liabilities	(16)		—		Other long-term liabilities	—		(50)

Net cash used in operating activities	Net cash used in operating activities	(18,388)		(18,783)		Net cash used in operating activities	(34,156)		(25,836)

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)


		Three Months Ended March 31,					Six Months Ended June 30,
(Amounts in thousands)	(Amounts in thousands)	2023		2022		(Amounts in thousands)	2023		2022
Cash flows from investing activities	Cash flows from investing activities					Cash flows from investing activities
Purchases of investments	Purchases of investments	$	(108,163)	$	—	Purchases of investments	$	(128,563)	$	—
Sales and maturities of investments	Sales and maturities of investments	57,909		18,000		Sales and maturities of investments	101,852		36,000

Purchases of property, plant and equipment	Purchases of property, plant and equipment	(154)		(1,579)		Purchases of property, plant and equipment	(255)		(3,297)
Proceeds from sale of assets	Proceeds from sale of assets	—		147		Proceeds from sale of assets	61		438

Net cash (used in) provided by investing activities	Net cash (used in) provided by investing activities	(50,408)		16,568		Net cash (used in) provided by investing activities	(26,905)		33,141
Cash flows from financing activities	Cash flows from financing activities					Cash flows from financing activities
Proceeds from issuance of shares, net of issuance costs	Proceeds from issuance of shares, net of issuance costs	73,501		—		Proceeds from issuance of shares, net of issuance costs	72,808		—

Payments of long-term debt	Payments of long-term debt	(29,270)		(164)		Payments of long-term debt	(43,099)		(277)
Payments of cost to retire long-term debt	Payments of cost to retire long-term debt	(57)		—		Payments of cost to retire long-term debt	(120)		—
Proceeds from stock option exercises	Proceeds from stock option exercises	—		1		Proceeds from stock option exercises	—		1

Net cash provided by(used in) financing activities	Net cash provided by(used in) financing activities	44,174		(163)		Net cash provided by(used in) financing activities	29,589		(276)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(28)		(230)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(172)		(471)
Net decrease in cash, cash equivalents, and restricted cash	Net decrease in cash, cash equivalents, and restricted cash	(24,650)		(2,608)		Net decrease in cash, cash equivalents, and restricted cash	(31,644)		6,558
Cash, cash equivalents, and restricted cash	Cash, cash equivalents, and restricted cash					Cash, cash equivalents, and restricted cash
Beginning of period	Beginning of period	48,596		43,343		Beginning of period	48,596		43,343
End of period	End of period	$	23,946	$	40,735	End of period	$	16,952	$	49,901
Supplemental disclosure of cash flow information	Supplemental disclosure of cash flow information					Supplemental disclosure of cash flow information
Cash paid during the period for interest	Cash paid during the period for interest	$	924	$	3,535	Cash paid during the period for interest	$	1,156	$	3,568

Significant noncash activities						Significant noncash activities

Accrued compensation paid in equity awards	Accrued compensation paid in equity awards	$	3,361	$	1,698	Accrued compensation paid in equity awards	$	3,361	$	1,698
Purchases of property and equipment included in accounts payable and other accrued liabilities	Purchases of property and equipment included in accounts payable and other accrued liabilities	24		251		Purchases of property and equipment included in accounts payable and other accrued liabilities	19		234

Proceeds from sale of assets included in accounts receivable	Proceeds from sale of assets included in accounts receivable	—		132		Proceeds from sale of assets included in accounts receivable	—		147
Issuance costs included in accounts payable and other accrued liabilities		719		—

The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of ~~March 31,~~June 30, 2023 and December 31, 2022 as shown above:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	9,740	$	4,858	Cash and cash equivalents	$	16,546	$	4,858
Restricted cash	Restricted cash	13,800		43,339		Restricted cash	—		43,339

Restricted cash included in other assets	Restricted cash included in other assets	406		399		Restricted cash included in other assets	406		399
Cash, cash equivalents, and restricted cash	Cash, cash equivalents, and restricted cash	$	23,946	$	48,596	Cash, cash equivalents, and restricted cash	$	16,952	$	48,596

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 dedicated discovery and clinical-stage biopharmaceutical company advancing the next generation of gene and cell therapies with the overall goal of improving outcomes for patients with significant unmet medical needs. Precigen is leveraging its proprietary technology platforms to develop product candidates designed to target urgent and intractable diseases in its core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. Precigen has developed an extensive pipeline of therapies across multiple indications within these core focus areas. ~~Precigen’~~Precigen’s primary operations are located in the State of Maryland.

Precigen also has two wholly owned operating subsidiaries. Precigen ActoBio, Inc. ("ActoBio"), and Exemplar Genetics,LLC, doing business as Precigen Exemplar ("Exemplar").

ActoBio is pioneering a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics, with its primary operations located in Ghent, Belgium.

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. Exemplar’s primary operations are located in the State of Iowa.

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 interim 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 ~~March 31,~~June 30, 2023 and results of operations and cash flows for the interim periods ended ~~March 31,~~June 30, 2023 and 2022. 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 results are not necessarily indicative of the results to be expected for the year ending December 31, 2023, or for any other future annual or interim period. The accompanying interim 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, 2022.

The accompanying condensed consolidated financial statements reflect the operations of Precigen and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Liquidity

Management believes that existing liquid assets as of ~~March 31,~~June 30, 2023 will allow the Company to continue its operations for at least a year from the issuance date of these condensed consolidated financial statements. These condensed consolidated financial statements are presented in United States dollars. Additionally, the 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 ~~three~~six months ended ~~March 31,~~June 30, 2023, the Company incurred a net loss of ~~$22,734~~$43,053 and, as of ~~March 31,~~June 30, 2023, had an accumulated deficit of ~~$1,891,301.~~$1,911,620. 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 out-licensing of core or non-core assets, or other transactions), ~~adequately satisfy or renegotiate 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.

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Risks and Uncertainties

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 and its collaborators' therapeutic product candidates.

Research and Development

The Company considers that regulatory requirements inherent in the research and development of new products preclude it from capitalizing such costs. Research and development expenses include salaries and related costs of research and development personnel, including stock-based compensation expense, costs to acquire technology rights, contract research organizations and consultants, facilities, materials and supplies associated with research and development projects as well as various laboratory studies. Costs incurred in conjunction with collaboration and licensing arrangements are included in research and development. Indirect research and development costs include depreciation, amortization, and other indirect overhead expenses.

The Company has research and development arrangements with third parties that include upfront and milestone payments. As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company had research and development commitments with third parties that had not yet been incurred totaling ~~$18,153~~$19,525 and $19,909, respectively. The commitments are generally cancellable by the Company by providing written notice at least sixty days before the desire termination date.

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less at the date of purchase are considered to be cash equivalents. Cash balances at a limited number of banks may periodically exceed insurable amounts. The Company believes that it mitigates its risk by investing in or through major financial institutions. Recoverability of investments is dependent upon the performance of the issuer. As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company had cash equivalent investments in highly liquid money market accounts at major financial institutions of ~~$5,626~~$11,390 and $3, respectively, which isare included in cash and cash equivalents in the accompanying consolidated balance sheets.

Restricted Cash

Included in the condensed consolidated balance sheet as of ~~March 31, 2023 and~~ December 31, 2022, is restricted cash of ~~$13,800 and $43,339, respectively.~~$43,339. This cash iswas restricted for the permitted purposes related to our Convertible Notes, including the resolution of such notes.

Short-term and Long-Term Investments

As of ~~March 31,~~June 30, 2023 and December 31, 2022 short-term and long-term investments include United States government debt and agency securities and certificates of deposit. The Company determines the appropriate classification as short-term or long-term at the time of purchase based on original maturities and management's reasonable expectation of sales and redemption. The Company reevaluates such classification at each balance sheet date.

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset and liability. As a basis for considering such assumptions, the Company uses a three-tier fair value hierarchy that prioritizes the inputs used in its fair value measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

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Level 1:			Quoted prices in active markets for identical assets and liabilities;

Level 2:			Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly; and

Level 3:			Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available.

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 and the if-converted 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 as described in the next ~~paragraph, therefore,~~paragraph. Therefore, basic and diluted net loss per share were the same for all periods presented. See Note 11 for ~~the~~ further discussion of the Company's Share Lending Agreement.

In accordance with Accounting Standards Codification (“ASC”) 260, the control number for determining whether including potential common shares in the diluted earnings per share, or EPS, computation would be ~~antidilutive~~anti-dilutive is income (loss) from continuing operations. As a result, if there is a loss from continuing operations, diluted EPS would be computed in the same manner as basic EPS is computed, even if the entity has net income after including discontinued operations. The following potentially dilutive securities as of ~~March 31,~~June 30, 2023 and 2022, 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:


		March 31,			June 30,
		2023	2022		2023	2022

Options	Options	16,945,209	16,034,553	Options	22,325,095	15,492,339
Restricted stock units	Restricted stock units	1,877,308	1,185,205	Restricted stock units	1,877,308	714,687
Warrants	Warrants	—	121,888	Warrants	—	121,888
Total	Total	18,822,517	17,341,646	Total	24,202,403	16,328,914

In addition, the Company's Convertible Notes, ~~convert~~prior to their retirement in the second quarter of 2023, were convertible at an exercise price of approximately $17.05 per share of common stock, representing approximately ~~812,178 shares at March 31, 2023 and~~ 11,732,440 shares at ~~March 31,~~June 30, 2022. The shares underlying the ~~Convertibles~~Convertible Notes were considered for the dilutive calculation but were excluded in all periods presented as their effect ~~is antidilutive.~~was anti-dilutive. See Note 9 for further discussion of the Convertible Notes.

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 consists of (i) Biopharmaceuticals and (ii) Exemplar, each an operating segment ~~which were~~that was also determined to be a reportable ~~segments.~~segment. The Biopharmaceuticals reportable segment is primarily comprised of the Company's legal entities of Precigen and ActoBio. See Note 1 for a description of Precigen, ActoBio and Exemplar. Prior to January 1, 2023, corporate expenses were not allocated to the segments and were managed at a consolidated level. Corporate expenses, include costs associated with general and administrative functions, including the Company's finance, accounting, legal, human resources, information technology, corporate communication, 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 as well as dividend income. Beginning in the first quarter of 2023, the Company allocated certain corporate expenses to Precigen as its operations directly benefited from these expenditures, and are now included in the Biopharmaceuticals reportable segment. As presented in Note 15, the prior year period has been reclassified to conform to the current period’s presentation.

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

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date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

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 2020-06 iswas 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 healthcare company, onin August ~~18,~~ 2022, the Company completed the sale of 100% of the issued and outstanding membership interests in its wholly-owned subsidiary, Trans Ova, to Spring Bidco LLC (the “Buyer”), a Delaware limited liability company for $170,000 and up to $10,000 in cash earn-out payments contingent upon the performance of Trans Ova in each of 2022 and 2023, consisting of $5,000 for each year (the “Transaction”). The Company received $162,306 in proceeds, net of certain transaction costs, on August 18, 2022, after giving effect to the preliminary closing purchase price adjustments. The final working capital adjustment of $936 was received in the fourth quarter of 2022. In February 2023, the buyer notified the Company that Trans Ova did not meet the financial measures required in 2022 in order to require the first $5,000 earn-out payment.

The Company elected to account for the contingent consideration arrangement as a gain contingency in accordance with ASC 450, Contingencies (Subtopic 450-30). Under this approach, the Company recognizes the contingent consideration receivable in earnings after the contingency is resolved. Accordingly, to determine the initial gain on the sale of Trans Ova, the Company did not include an amount related to the contingent consideration arrangement as part of the consideration received.

In connection with the Transaction, the Company ~~as of March 31, 2023, holds~~held restricted cash ~~of $13,800,~~ in a segregated account to be used for certain permitted purposes, including resolution of the Company’s outstanding Convertible Notes which were retired in the second quarter of 2023, as discussed further in Note 9. In addition, the Company is required to indemnify the Buyer for certain expenses incurred post close (related to covenants and certain additional specified liabilities including certain patent infringement lawsuits), if incurred, in amounts not to exceed ~~$5,750, which~~$5,750. Such indemnification was recorded as a reduction of the gain on divestiture in the third quarter of 2022, and is included in ~~other accrued liabilities~~Settlement and Indemnification accruals as of ~~March 31,~~June 30, 2023. To date, the Company has ~~not~~ received an indemnification ~~claim.~~claim of $675 that has not been paid as of June 30, 2023.

~~There were no discontinued operations related to Trans Ova for the three months ended March 31, 2023.~~ The following table presents the financial results of discontinued operations related to Trans Ova for the three and six months ended ~~March 31,~~June 30, 2022:

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~~Product revenues~~	$	~~8,232~~
~~Service revenues~~	~~18,276~~
~~Total revenues~~	~~26,508~~
~~Cost of products and services~~	~~15,405~~

~~Research and development~~	~~959~~
~~Selling, general and administrative~~	~~5,887~~
~~Total operating expenses~~	~~22,251~~
~~Operating income~~	~~4,257~~
~~Other income, net~~	~~390~~



~~Income from discontinued operations~~	$	~~4,647~~


	Three months ended June 30,		Six Months Ended June 30,
	2022
Product revenues	$	8,940	$	17,172
Service revenues	23,501		41,777
Total revenues	32,441		58,949
Cost of products and services	17,415		32,820

Research and development	908		1,867
Selling, general and administrative	6,124		12,011
Total operating expenses	24,447		46,698
Operating income	7,994		12,251
Other income, net	430		820



Income from discontinued operations	$	8,424	$	13,071

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 for the ~~three~~six months ended ~~March 31,~~June 30, 2022 that are included in the accompanying condensed consolidated statements of cash flows.




Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization	$	~~1,374~~2,765
~~(Gain)~~ Loss on disposal of assets	~~125~~360




Stock-based compensation expense	3868

Provision for credit losses	~~334~~735
Cash flows from investing activities
Purchases of property, plant and equipment	~~(1,083)~~(2,629)
Proceeds from sale of assets	~~147~~438
Cash flows from financing activities
Payments of long-term debt	~~(112)~~(225)

4. Collaboration and Licensing Revenue

The Company's collaborations and licensing agreements may provide for multiple promises to be satisfied by the Company and typically include a license to the Company's technology platforms, participation in collaboration committees, and performance of certain research and development services. Based on the nature of the promises in the Company's collaboration and licensing agreements, the Company typically combines most of its promises into a single performance obligation because the promises are highly interrelated and not individually distinct. Options to acquire additional services are considered to determine if they constitute material rights. At contract inception, the transaction price is typically the upfront payment received and is allocated to the performance obligations. The Company has determined the transaction price should be recognized as revenue based on its measure of progress under the agreement primarily based on inputs necessary to fulfill the performance obligation.

The Company determines whether collaborations and licensing agreements are individually significant for disclosure based on a number of factors, including total revenue recorded by the Company pursuant to collaboration and licensing agreements, collaborators or licensees with equity method investments, or other qualitative factors. Collaboration and licensing revenues generated from consolidated subsidiaries are eliminated in consolidation.

There were no material amounts recognized as revenue for the three and six months ended ~~March 31,~~June 30, 2023 and 2022.

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Alaunos License Agreement

On April 3, 2023, the Company entered into an amended and restated exclusive license agreement (the “License Agreement”), with Alaunos Therapeutics (“Alaunos”). The License Agreement amended and replaced the terms of the Exclusive License Agreement by and between the Company and Alaunos, dated October 5, 2018.

Pursuant to the terms of the License Agreement, the Company has granted Alaunos an exclusive, worldwide, royalty-free, sub-licensable license to research, develop and commercialize T-cell receptor products, designed for neoantigens for the treatment of cancer or the treatment and prevention of human papilloma virus, or HPV, to the extent that the primary reason for such treatment or prevention is to prevent cancer, which is referred to as the HPV Field. The Company has also granted Alaunos an exclusive, worldwide, royalty-free, sub-licensable license for certain patents relating to the Sleeping Beauty technology to research, develop and commercialize TCR Products for both neoantigens and shared antigens for the treatment of cancer and in the HPV Field. The Company also granted Alaunos certain non-exclusive rights with respect to shared antigens, NK cells and gamma delta T-cells. Alaunos will be solely responsible for all aspects of the research, development and commercialization of the exclusively licensed products for the treatment of cancer and will not be subject to a diligence obligation with respect to such efforts.

Pursuant to the License Agreement, Alaunos no longer has any rights to certain of the Company’s technology including with respect to (i) products utilizing the Company’s RheoSwitch® gene switch, or RTS to express IL-12, or the IL-12 Products, for the treatment of cancer, (ii) chimeric antigen receptor, or CAR, products including CD19 and BCMA, or (iii) products utilizing an additional construct that expresses RTS IL-12, or Gorilla IL-12 Products, for the treatment of cancer and in the HPV Field. In addition, the Company may research, develop and commercialize products for the treatment of cancer, outside of the products exclusively licensed to Alaunos. Alaunos will provide the Company with certain access to information and materials related to Alaunos’s prior use of the Company’s technologies that is no longer within the scope of the License Agreement.

In consideration of the licenses and other rights granted by the Company, Alaunos will pay the Company an annual license fee of $0.1 million. Neither Alaunos nor the Company will have any other obligations with respect to the payment of milestones or royalties on products developed in connection with the License Agreement.

The Company has agreed that, during the term of the License Agreement, it will not use the licensed intellectual property to research, develop or commercialize any exclusive product for the treatment of cancer. The License Agreement will terminate on a product-by-product and/or country-by-country basis upon the expiration of the last to expire patent claim for a licensed product. In addition, Alaunos may terminate the License Agreement on a country-by-country or program-by-program basis following written notice to the Company, and either party may terminate the License Agreement following notice of a material breach. The License Agreement also contains customary representations, warranties and covenants from Alaunos and the Company, as well as customary provisions related to indemnity, confidentiality and other matters.

Deferred Revenue

Deferred revenue primarily consists of upfront and milestone consideration received for the Company's collaboration and licensing agreements. Revenue is recognized as services are performed. The arrangements classified as long-term are not active while the respective counterparties evaluate the status of the project and its desired future development activities since the Company cannot reasonably estimate the amount of service to be performed over the next year.

~~Deferred~~As of June 30, 2023 and December 31, 2022, the Company had long-term deferred revenue ~~consisted~~for collaboration and licensing arrangements of ~~the following:~~$1,818, and deferred revenue classified as current related to prepaid products and services of $15 and $25, respectively.

March 31,
2023 December 31,
2022
Collaboration and licensing agreements $ 1,818 $ 1,818
Prepaid product and service revenues 15 15
Other — 10
Total $ 1,833 $ 1,843
Current portion of deferred revenue $ 15 $ 25
Long-term portion of deferred revenue 1,818 1,818
Total $ 1,833 $ 1,843

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5. Short-term and Long-term Investments

The Company's investments are classified as available-for-sale. The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of ~~March 31,~~June 30, 2023:


		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
U.S. government debt securities	U.S. government debt securities	$	96,820	$	—	$	(498)	$	96,322	U.S. government debt securities	$	73,047	$	15	$	(276)	$	72,786
U.S. agency securities	U.S. agency securities	992		—		—		992		U.S. agency securities	991		8		(13)		986
Certificates of deposit	Certificates of deposit	4,497		—		—		4,497		Certificates of deposit	5,247		—		(4)		5,243
Total	Total	$	102,309	$	—	$	(498)	$	101,811	Total	$	79,285	$	23	$	(293)	$	79,015

The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of December 31, 2022:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value
U.S. government debt securities	$	51,755	$	—	$	(760)	$	50,995
Certificates of deposit	97		—		—		97
Total	$	51,852	$	—	$	(760)	$	51,092

The estimated fair value of available-for-sale investments classified by their contractual maturities as of ~~March 31,~~June 30, 2023 was:


Due within one year	$	~~94,351~~71,888
After one year through two years	~~7,460~~7,127
Total	$	~~101,811~~79,015

Changes in market interest rates and bond yields cause certain investments to fall below their cost basis, resulting in unrealized losses on investments. We do not intend to sell these investments nor is it more likely than not that the Company will be required to sell these investments, prior to maturity or recovery of amortized cost.

6. Fair Value Measurements

The carrying amount of cash and cash equivalents, receivables, accounts payable, accrued compensation and benefits, other accrued liabilities, and related party payables approximate fair value due to the short maturity of these instruments.

Assets

The following table presents the placement in the fair value hierarchy of financial assets that are measured at fair value on a recurring basis as of ~~March 31,~~June 30, 2023:


		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		March 31, 2023			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2023
Assets	Assets									Assets
U.S. government debt securities	U.S. government debt securities	$	—	$	96,322	$	—	$	96,322	U.S. government debt securities	$	—	$	72,786	$	—	$	72,786
U.S. agency securities	U.S. agency securities			992				992		U.S. agency securities			986				986
Certificates of deposit	Certificates of deposit	—		4,497		—		4,497		Certificates of deposit	—		5,243		—		5,243
Total	Total	$	—	$	101,811	$	—	$	101,811	Total	$	—	$	79,015	$	—	$	79,015

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The following table presents the placement in the fair value hierarchy of financial assets that are measured at fair value on a recurring basis as of December 31, 2022:


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2022
Assets
U.S. government debt securities	$	—	$	50,995	$	—	$	50,995
Certificates of deposit	—		97		—		97
Total	$	—	$	51,092	$	—	$	51,092

The method used to estimate the fair value of the Level 2 short-term and long-term debt investments in the tables above is based on professional pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets.

Liabilities

The calculated fair value of the Convertible Notes (Note 9) was approximately ~~$14,000 and~~ $43,000 as of ~~March 31, 2023 and~~ December 31, 2022, ~~respectively,~~ and iswas based on the recent third-party trades of the instrument as of the balance sheet date. The fair value of the Convertible Notes is classified as Level 2 within the fair value hierarchy as there is not an active market for the Convertible Notes, however, third-party trades of the instrument are considered observable inputs. The Convertible Notes are reflected on the accompanying condensed consolidated balance sheets at amortized cost, which was ~~$13,819 and~~ $43,219 as of ~~March 31, 2023 and~~ December 31, ~~2022,~~2022.

See Note 8 for discussion of non-recurring fair value estimates used in calculating an impairment charge recorded during the ~~three~~six months ended ~~March 31, 2022~~June 30, 2022.

7. Property, Plant and Equipment, Net

Property, plant and equipment consist of the following:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
Land and land improvements	Land and land improvements	$	164	$	164	Land and land improvements	$	164	$	164
Buildings and building improvements	Buildings and building improvements	2,592		2,592		Buildings and building improvements	2,629		2,592
Furniture and fixtures	Furniture and fixtures	507		457		Furniture and fixtures	508		457
Equipment	Equipment	18,428		18,006		Equipment	18,541		18,006
Leasehold improvements	Leasehold improvements	4,325		4,333		Leasehold improvements	4,324		4,333
Breeding stock	Breeding stock	128		123		Breeding stock	138		123
Computer hardware and software	Computer hardware and software	4,607		4,562		Computer hardware and software	4,638		4,562
Construction and other assets in progress	Construction and other assets in progress	151		531		Construction and other assets in progress	106		531
		30,902		30,768			31,048		30,768
Less: Accumulated depreciation and amortization	Less: Accumulated depreciation and amortization	(23,994)		(23,439)		Less: Accumulated depreciation and amortization	(24,474)		(23,439)
Property, plant and equipment, net	Property, plant and equipment, net	$	6,908	$	7,329	Property, plant and equipment, net	$	6,574	$	7,329

Depreciation expense was ~~$506~~$475 and ~~$653~~$616 for the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively, and $981 and $1,269 for the six months ended June 30, 2023 and 2022, respectively.

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8. Goodwill and Intangible Assets, Net

The changes in the carrying amount of goodwill for the ~~three~~six months ended ~~March 31,~~June 30, 2023 were as follows:


Balance at December 31, 2022	$	36,923

Foreign currency translation adjustments	43
Balance at ~~March 31,~~June 30, 2023	$	36,966

The Company ~~recorded $482 of goodwill impairment related to the total goodwill assigned to one reporting unit within the biopharmaceutical segment during the first quarter of 2022.~~

~~The Company~~ had $14,483 of cumulative impairment losses as of both ~~March 31,~~June 30, 2023 and December 31, 2022.

Intangible assets consist of the following as of ~~March 31,~~June 30, 2023:


		Gross Carrying Amount		Accumulated Amortization		Net			Gross Carrying Amount		Accumulated Amortization		Net
Patents, developed technologies and know-how	Patents, developed technologies and know-how	$	81,553	$	(37,705)	$	43,848	Patents, developed technologies and know-how	$	81,598	$	(38,942)	$	42,656
Customer relationships	Customer relationships	1,600		(1,600)		—		Customer relationships	1,600		(1,600)		—
Trademarks	Trademarks	200		(200)		—		Trademarks	200		(200)		—
Total	Total	$	83,353	$	(39,505)	$	43,848	Total	$	83,398	$	(40,742)	$	42,656

Intangible assets consist of the following as of December 31, 2022:


	Gross Carrying Amount		Accumulated Amortization		Net
Patents, developed technologies and know-how	$	80,892	$	(36,437)	$	44,455
Customer relationships	1,600		(1,600)		—
Trademarks	200		(200)		—
Total	$	82,692	$	(38,237)	$	44,455

Amortization expense was ~~$1,205~~$1,218 and ~~$1,265~~$1,219 for the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively, and $2,423 and $2,484 for the six months ended June 30, 2023 and 2022, respectively.

9. Lines of Credit and Short-Term Debt

Lines of Credit

Exemplar has a $2,500 revolving line of credit that matures on October 31, 2023. As of ~~March 31,~~June 30, 2023, the line of credit ~~bore~~bears interest at a stated rate of 7.00% per annum. As of ~~March 31,~~June 30, 2023 and December 31, 2022, there was no outstanding balance on the line of credit.

Short-Term Debt

As of ~~both March 31, 2023 and~~ December 31, 2022, ~~$13,819 and~~ $43,219 of ~~short- term~~short-term debt consisted solely of the Company's Convertible Notes.

Convertible Debt

Precigen Convertible Notes

In July 2018, Precigen completed a registered underwritten public offering of $200,000 aggregate principal amount of Convertible Notes and issued the Convertible Notes under an indenture ~~(the "Base Indenture")~~ between Precigen and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by the First Supplemental ~~Indenture (together with the~~

~~Base Indenture, the "Indenture"). Precigen received net proceeds of $193,958 after deducting underwriting discounts and offering expenses of $6,042.~~Indenture.

The Convertible Notes ~~are~~were senior unsecured obligations of Precigen and ~~bear~~bore interest at a rate of 3.50% per year, payable semiannually in arrears on January 1 and July 1 of each year beginning on January 1, 2019. The Convertible Notes ~~mature~~matured on

July 1, 2023, ~~and are repayable in cash, unless earlier~~although certain notes were repurchased or converted. Upon conversion by the holders, the Convertible Notes are convertible into cash, shares of Precigen's common stock or a combination of cash and shares, at Precigen's election. The initial conversion rate of the Convertible Notes is 58.6622 shares of Precigen common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $17.05 per share of common stock). The conversion rate is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to ~~the~~ maturity ~~date as defined~~beginning in ~~the Indenture, Precigen will increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event in certain circumstances. Prior to April 1,~~third quarter of 2022 (as discussed further below).On June 30, 2023, the ~~holders may convert the~~Company re-purchased all remaining outstanding Convertible Notes at ~~their option only upon the satisfaction of the following circumstances:~~

•During any calendar quarter commencing after the calendar quarter ended on September 30, 2018, if the last reported sales price of Precigen's common stock for at least 20 trading days (whether or not consecutive) during the last 30 consecutive trading days of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•During the five business day period after any five consecutive trading day period in which the trading price, as defined in the Indenture, for the Convertible Notes is less than 98% of the product of the last reported sales price of Precigen's common stock and the conversion rate for the Convertible Notes on each such trading day; or

•~~Upon the occurrence of specified corporate events as defined in the Indenture.~~

None of the above events allowing for conversion prior to April 1, 2023 occurred during the three months ended March 31, 2023. On or after April 1, 2023 until June 30, 2023, holders may convert their Convertible Notes at any time. Precigen may not redeem the Convertible Notes prior to the maturity date.

If Precigen undergoes a fundamental change, as defined in the Indenture, holders of the Convertible Notes may require Precigen to repurchase for cash all or any portion of their Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased,par plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture contains customary events of default, as defined in the agreement, and, if any of the events occur, could require repayment of a portion or all of the Convertible Notes, including accrued and unpaid interest. Additionally, the Indenture provides that Precigen shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to, another entity, unless (i) the surviving entity is organized under the laws of the United States and such entity expressly assumes all of Precigen's obligations under the Convertible Notes and the Indenture; and (ii) immediately after such transaction, no default or event of default has occurred and is continuing under the Indenture.

The net proceeds received from the issuance of the Convertible Notes were initially allocated between long-term debt, the liability component, in the amount of $143,723, and additional paid-in capital, the equity component, in the amount of $50,235. Additional paid-in capital was further reduced by $13,367 of deferred taxes resulting from the difference between the carrying amount and the tax basis of the Convertible Notes that is created by the equity component, which also resulted in deferred tax benefit recognized from the reversal of valuation allowances on the then current year domestic operating losses in the same amount.

As described in Note 2, the Company adopted ASU 2020-06 on January 1, 2022. Pursuant to ASU 2020-06, the equity components of the Convertible Notes separated from the debt components as required under the cash conversion model is required to be recombined into the Convertible Notes as a single instrument upon the adoption of ASU 2020-06. The Convertible Notes shall be accounted for as if the conversion option had not been separated. As the Company elected the modified retrospective approach, the difference between the accounting under the cash conversion model and new model after the adoption of ASU 2020-06 (i.e., the single debt instrument with no separation) was recorded as an adjustment on the adoption date (i.e., January 1, 2022) through accumulated deficit. Tax accounting consequences of the adoption also required the reversal of the previously reported deferred tax benefit on the date of adoption.

Adoption of ASU 2020-06 resulted in an increase to long-term debt outstanding, net of current portion, of $18,196, a decrease to additional paid-in capital of $36,868, and a decrease to accumulated deficit of $18,672. Interest expense recognized on the

~~Convertible Notes in future periods will be reduced as a result of accounting for the convertible debt instrument as a single liability measured at its amortized cost.~~

As discussed in Note 3, in connection with the sale of Trans Ova in 2022, the Company transferred a total of $200,000 into a segregated account to be used for certain permitted purposes, including resolution of the Company's outstanding ~~Convertibles~~Convertible Notes. During the year December 31, 2022 and subsequently, the Company executed open market purchases of a portion of the outstanding Convertible Notes. During ~~three~~the six months ended ~~March 31,~~June 30, 2023, the Company retired, ~~$29,495~~through open market purchases and payment upon maturity, $43,340 of principal balance ~~from these purchases~~ and recorded a gain on extinguishment of debt of approximately ~~$54,~~$61, which was recorded within Other income (expense), net, within the condensed consolidated statements of operations. The Company had previously retired $156,660 of principal balance from purchases during the year ended December 31, 2022. As of ~~March 31,~~June 30, 2023, ~~$13,800 of~~no restricted cash remained in the segregated account noted above, ~~for permitted purposes including the resolution~~as all of the Company's outstanding Convertible ~~Notes.~~

~~As of March 31, 2023, the outstanding principal balance of the Convertible~~ Notes was $13,845 and the carrying value of the Convertible Notes was $13,819. The effective interest rate on the Convertible Notes, including amortization of the long-term debt discount and debt issuance costs, is 4.25%. As of March 31, 2023, the unamortized long-term debt discount and debt issuance costs totaled $26.had been retired.

The components of interest expense related to the Convertible Notes were as follows:

Three Months Ended
March 31,
2023 2022
Cash interest expense $ 289 $ 1,750
Non-cash interest expense 34 284
Total interest expense $ 323 $ 2,034

~~Accrued interest of $127 is included in other accrued liabilities on the accompanying condensed consolidated balance sheet as of March 31, 2023.~~


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Cash interest expense	$	108	$	1,750	$	397	$	3,500
Non-cash interest expense	26		312		60		596
Total interest expense	$	134	$	2,062	$	457	$	4,096

10. Income Taxes

For the three and six months ended ~~March 31,~~June 30, 2023, the Company calculated its tax benefit using the estimated annual effective tax rate method. The rate is the ratio of estimated annual income tax expense related to estimated pretax loss from continuing operations, excluding significant unusual or infrequently occurring items. As a result of the pretax losses anticipated for the full year which are not benefited, this rate has been calculated and applied to the year-to-date interim period’s ordinary income or loss on a jurisdiction by jurisdiction basis to determine the income tax expense/benefit allocated to the year-to-date period. The annual effective tax rate is revised, if necessary, at the end of each interim period based on the Company’s most current best estimate. The Company recorded ~~$55~~ $65 and $120 of income tax benefit from continuing operations for the three and six months ended ~~March 31,~~June 30, 2023., respectively. The effective tax rate differs from the U.S. statutory tax rate, primarily as a result of the change in valuation allowance required.

For the three and six months ended ~~March 31,~~June 30, 2022, the Company calculated its tax benefit using an estimate of actual taxable income or loss for the period, rather than estimating the Company's annual effective income tax rate, as the Company was unable to reliably estimate its income for the full year. The Company recorded ~~$58~~$89 and $147 of income tax benefit from continuing operations for the three and six months ended ~~March 31, 2022.~~June 30, 2022, respectively. The effective tax rate differs from the U.S. statutory tax rate, primarily as a result of the change in valuation allowance required.

The Company's net deferred tax assets are offset by a valuation allowance due to the Company's history of net losses combined with an inability to confirm recovery of the tax benefits of the Company's tax attributes and other net deferred tax assets. A portion of the Company’s tax attributes are subject to annual limitations under Section 382 of the Internal Revenue Code. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management

considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

11. Shareholders' Equity

Issuances of Precigen Common Stock

In January 2023, the Company closed a public offering of 43,962,640 shares of its common stock, resulting in net proceeds of ~~$72,782,~~$72,808, after deducting underwriting discounts, fees, and other ~~underwriting~~offering expenses. Of the 43,962,640 shares, 11,517,712 shares were purchased by related parties and their affiliates, including the Company's Chief Executive Officer, its Chairman of the Board of Directors and his affiliates, and certain other of the Company's officers.

We completed the offering of shares of common stock, utilizing a number of underwriters, with J.P. Morgan Securities LLC is acting as representative of the underwriters. ~~The underwriting fee was equal to the public offering price per share of common stock less the amount paid by the underwriters to us per share of common stock,~~ The services provided by JP Morgan Securities LLC were in the ordinary course of their role as lead underwriter, for which they received customary fees and commissions.

~~See Note 9 for discussion regarding conversion features of the convertible notes.~~

Share Lending Agreement

Concurrently with the offering of the Convertible Notes (Note 9), Precigen entered into a share lending agreement (the "Share Lending Agreement") with J.P. Morgan Securities LLC (the "Share Borrower") pursuant to which Precigen loaned and delivered 7,479,431 shares of its common stock (the "Borrowed Shares") to the Share Borrower. The Share Lending Agreement will terminate, and the Borrowed Shares will be returned to Precigen within five business days of such termination, upon (i) termination by the Share Borrower or (ii) the earliest to occur of (a) October 1, 2023 and (b) the date, if any, on which the Share Lending Agreement is either mutually terminated or terminated by one party upon a default by the other party. The Share Borrower maintains collateral in the form of cash or certain permitted non-cash collateral with a market value at least equal to the market value of the Borrowed Shares as security for the obligation of the Share Borrower to return the Borrowed Shares when required by the terms above. The Borrowed Shares were offered and sold to the public at a price of $13.37 per share under a registered offering (the "Borrowed Shares Offering"). Precigen did not receive any proceeds from the sale of the Borrowed Shares to the public or any lending fees from the Share Lending Agreement. The Share Borrower or its affiliates received all the proceeds from the sale of the Borrowed Shares to the public. Affiliates of Third Security purchased all of the shares of common stock in the Borrowed Shares Offering.

The Share Lending Agreement was entered into at fair value and met the requirements for equity classification. Therefore, the value is netted against the issuance of the Borrowed Shares in additional paid-in capital. Additionally, the Borrowed Shares are not included in the denominator for loss per share attributable to Precigen shareholders unless the Share Borrower defaults on the Share Lending Agreement.

At-the-Market Sales Agreement

On August 9, 2022, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company may issue and sell from time to time shares of the Company’s common stock, no par value per share (the “Shares”), through the Agent. The offering and sale of up to $100,000 of the Shares has been registered under the Securities Act of 1933. The Company has no obligation to sell any of the Shares under the Sales Agreement, and may at any time suspend or terminate the offering of its common stock pursuant to the Sales Agreement upon notice and subject to other conditions. The Company intends to use the proceeds of any sales to fund the development of clinical and preclinical product candidates and for working capital and other general corporate purposes.

No shares were sold in connection with the Sales Agreement during the six months ended June 30, 2023 nor for the year ended December 31, 2022.

Components of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
Unrealized loss on investments	Unrealized loss on investments	$	(498)	$	(760)	Unrealized loss on investments	$	(270)	$	(760)
Loss on foreign currency translation adjustments	Loss on foreign currency translation adjustments	(2,201)		(2,728)		Loss on foreign currency translation adjustments	(2,248)		(2,728)
Total accumulated other comprehensive loss	Total accumulated other comprehensive loss	$	(2,699)	$	(3,488)	Total accumulated other comprehensive loss	$	(2,518)	$	(3,488)

12. Share-Based Payments

The Company measures the fair value of stock options and restricted stock units ("RSUs") issued to employees and nonemployees as of the grant date for recognition of stock-based compensation expense. Stock-based compensation expense for employees and nonemployees is recognized over the requisite service period, which is typically the vesting period. Stock-based compensation costs included in the condensed consolidated statements of operations are presented below:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Cost of products		$	7	$	8
Cost of services		6		25
Cost of products and services							Cost of products and services	$	17	$	30	$	35	$	63

Research and development	Research and development	509		545			Research and development	582		589		1,087		1,134
Selling, general and administrative	Selling, general and administrative	2,609		2,946			Selling, general and administrative	1,589		1,660		4,198		4,606
Discontinued operations	Discontinued operations	—		38			Discontinued operations	—		30		—		68
Total	Total	$	3,131	$	3,562		Total	$	2,188	$	2,309	$	5,320	$	5,871

Precigen ~~Stock Option~~Equity Incentive Plans

In ~~April 2008,~~August 2013, Precigen adopted the 2008 Equity Incentive Plan (the "2008 Plan") for employees and nonemployees pursuant to which Precigen's board of directors granted share-based awards, including stock options, to officers, key employees and nonemployees. Upon the effectiveness of the 2013 Omnibus Incentive Plan ~~(the "2013~~("the 2013 Plan"), ~~no new awards may be granted under the 2008 Plan. As of March 31, 2023, there were 14,843 stock options outstanding under the 2008 Plan.~~

~~Precigen adopted the 2013 Plan~~ for employees and nonemployees pursuant to which Precigen's board of directors may grant share-based awards, including stock options, ~~and~~restricted stock units, shares of common stock and other awards, to employees, officers, consultants, advisors, and nonemployee directors. ~~The~~Upon the effectiveness of the 2023 Omnibus Incentive Plan in June 30, 2023, as discussed in the next paragraph, (the "2023 Plan"), no new awards may be granted under the 2013 Plan ~~became effective~~and any awards granted under the 2013 Plan prior to the effectiveness of the 2023 Plan will remain outstanding under such plan and will continue to vest and/or become exercisable in ~~August 2013,~~accordance with their original terms and asconditions. As of ~~March 31,~~June 30, 2023, there were ~~37,000,000~~19,167,088 stock options and 862,356 RSUs outstanding under the 2013 Plan.

In April 2023, Precigen adopted the 2023 Plan, which became effective upon shareholder approval in June 2023. The 2023 Plan permits the grant of share-based awards, including stock options, restricted stock awards, and RSUs and other awards, to officers, employees and nonemployees. The 2023 Plan authorizes for issuance pursuant to awards under the 2023 Plan an aggregate of 16,418,137 shares ~~authorized~~(which is comprised of 12,500,000 shares, plus 3,918,137 shares remaining available for issuance under the 2013 Plan as of ~~which 13,772,359 stock options and 862,356 RSUs~~the adoption of the 2023 Plan). As of June 30, 2023, no awards were ~~outstanding and 9,396,501 shares were available for grant. In April 2023, Precigen~~ granted ~~approximately 5,600,000 options in connection with~~under the ~~Company's annual long-term incentive compensation award for its' employees.~~plan.

In April 2019, Precigen adopted the 2019 Incentive Plan for Non-Employee Service Providers (the "2019 Plan"), which became effective upon shareholder approval in June 2019. The 2019 Plan permits the grant of share-based awards, including stock options, restricted stock awards, and RSUs, to non-employee service providers, including board members. As of ~~March 31,~~June 30, 2023, there were 12,000,000 shares authorized for issuance under the 2019 Plan, of which 3,158,007 stock options and 1,014,952 RSUs were outstanding and 4,502,466 shares were available for grant.

Stock option activity was as follows:


		Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2022	Balances at December 31, 2022	15,201,276	$	10.41	6.87	Balances at December 31, 2022	15,201,276	$	10.41	6.87
Granted	Granted	1,834,069	1.11			Granted	7,507,869	1.19

Exercised	Exercised	—	—			Exercised	—	—
Forfeited	Forfeited	(69,375)	5.29			Forfeited	(220,625)	2.74
Expired	Expired	(20,761)	19.15			Expired	(163,425)	17.74
Balances at March 31, 2023		16,945,209	9.41		6.90
Exercisable at March 31, 2023		11,559,913	11.40		6.29
Balances at June 30, 2023						Balances at June 30, 2023	22,325,095	7.33		7.54
Exercisable at June 30, 2023						Exercisable at June 30, 2023	11,759,874	11.22		6.14

RSU activity was as follows:


		Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)		Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)
Balances at December 31, 2022	Balances at December 31, 2022	697,815	$	2.66	0.13	Balances at December 31, 2022	697,815	$	2.66	0.13
Granted	Granted	4,083,777	1.01			Granted	4,083,777	1.01
Vested	Vested	(2,904,284)	1.70			Vested	(2,904,284)	1.37
Forfeited	Forfeited	—	—			Forfeited	—	—
Balances at March 31, 2023		1,877,308	1.07		0.68
Balances at June 30, 2023						Balances at June 30, 2023	1,877,308	1.07		0.43

Precigen currently uses authorized and unissued shares to satisfy share award exercises.

13. Operating Leases

The Company leases certain facilities and equipment under operating leases. Leases with a lease term of twelve months or less are considered short-term leases and are not recorded on the balance sheet, and expense for these leases is recognized over the term of the lease. All other leases have remaining terms of one to ~~nine~~seven years, some of which may include options to extend the lease and some of which may include options to terminate the lease within one year. The Company uses judgment to determine whether it is reasonably possible to extend the lease beyond the initial term or terminate before the initial term ends and the length of the possible extension or early termination. The leases are renewable at the option of the Company and do not contain residual value guarantees, covenants, or other restrictions.

The components of lease costs were as follows:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Operating lease costs	Operating lease costs	$	615	$	627		Operating lease costs	$	617	$	613	$	1,232	$	1,240
Short-term lease costs	Short-term lease costs	20		53			Short-term lease costs	10		49		30		102
Variable lease costs	Variable lease costs	120		103			Variable lease costs	86		121		206		224
Lease costs	Lease costs	$	755	$	783		Lease costs	$	713	$	783	$	1,468	$	1,566

As of ~~March 31,~~June 30, 2023, maturities of lease liabilities, excluding short-term and variable leases, for continuing operations were as follows:


2023	2023	$	1,596	2023	$	1,222
2024	2024	1,844		2024	2,029
2025	2025	1,817		2025	1,903
2026	2026	1,474		2026	1,503
2027	2027	1,228		2027	1,238
2028	2028	1,260		2028	1,260
Thereafter	Thereafter	1,847		Thereafter	1,847
Total	Total	11,066		Total	11,002
Present value adjustment	Present value adjustment	(3,199)		Present value adjustment	(3,036)
Total	Total	$	7,867	Total	$	7,966
Current portion of operating lease liabilities	Current portion of operating lease liabilities	$	1,244	Current portion of operating lease liabilities	$	1,421
Long-term portion of operating lease liabilities	Long-term portion of operating lease liabilities	6,623		Long-term portion of operating lease liabilities	6,545
Total	Total	$	7,867	Total	$	7,966

Other information related to operating leases in continuing operations was as follows:


		March 31, 2023		December 31, 2022			June 30, 2023		December 31, 2022
Weighted average remaining lease term (years)	Weighted average remaining lease term (years)	5.96		6.09		Weighted average remaining lease term (years)	5.61		6.09
Weighted average discount rate	Weighted average discount rate	11.05	%	11.05	%	Weighted average discount rate	11.08	%	11.05	%


		Three Months Ended March 31,					Six Months Ended June 30,
		2023		2022			2023		2022
Supplemental disclosure of cash flow information	Supplemental disclosure of cash flow information					Supplemental disclosure of cash flow information
Cash paid for operating lease liabilities	Cash paid for operating lease liabilities	$	463	$	639	Cash paid for operating lease liabilities	$	1,022	$	1,264
Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modifications of existing leases)	Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modifications of existing leases)	26		—		Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modifications of existing leases)	373		65

14. Commitments and Contingencies

Contingencies

In October 2020, several shareholder class action lawsuits were filed in the United States District Court for the Northern District of California on behalf of certain purchasers of the Company's common stock. The complaints name as defendants the Company and certain of its current and former officers. The plaintiffs' claims challenged disclosures about the MBP program from May 10, 2017 to March 1, 2019. In March 2021, the ~~court~~Court granted an order consolidating the claims and, in April 2021, appointed a lead plaintiff and lead counsel in the case, captioned In re Precigen Securities Litigation, Case No. 5:20-cv-06936-BLF (N.D. Cal.). On May 18, 2021, the lead plaintiff filed an Amended Class Action Complaint. On August 2, 2021, the defendants moved to dismiss the Amended Class Action Complaint. On September 27, 2021, the lead plaintiff filed a Second Amended Class Action Complaint in lieu of a response to the defendants’ motion to dismiss. On November 3, 2021, the defendants moved to dismiss the Second Amended Class Action Complaint and on May 31, 2022, the ~~court~~Court granted the defendants’ motion to dismiss the Second Amended Class Action Complaint with leave to amend. On August 1, 2022, the lead plaintiff filed a Third Amended Class Action Complaint.

On August 2, 2022, the Court granted the parties' request to conduct a private mediation session to explore potential resolution of the action. On November 17, 2022, at the conclusion of the mediation session, the parties executed a memorandum of understanding that agreed in principle to resolve the claims asserted in the securities class action. The settlement provides for a payment to the plaintiff class of $13,000. ~~The proposed settlement requires final negotiation~~On July 7, 2023, the Court granted preliminary approval of the ~~terms of~~ settlement and ~~both preliminary and~~scheduled a final approval ~~by the court.~~hearing for October 2023. Should the ~~court~~Court not approve the proposed settlement or if the proposed settlement otherwise does not become final, the parties will be returned to their litigation postures prior to the agreement in ~~principle to~~

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principle to settle. In the event that the litigation resumes, the defendants intend to move to dismiss the plaintiff’s Third Amended Class Action Complaint. As of both ~~March 31,~~June 30, 2023 and December 31,2022, the Company recorded an accrual of $13,000 in ~~Other accrued liabilities~~Settlement and Indemnification accruals on the condensed consolidated balance sheets for this matter. In addition, the Company separately recognized an insurance receivable asset of ~~$12,525~~$12,545 and $12,411 within Receivables, other, on the condensed consolidated balance sheets as of ~~March 31,~~June 30, 2023 and December 31,2022, , respectively.

In December 2020, a derivative shareholder action, captioned Edward D. Wright, derivatively on behalf of Precigen, Inc. F/K/A Intrexon Corp. v. Alvarez et al, was filed in the Circuit Court for Fairfax County in Virginia on behalf of Precigen, Inc. asserting similar claims under state law against Precigen's current directors and certain officers. The plaintiff seeks damages, forfeiture of benefits received by defendants, and an award of reasonable attorneys' fees and costs. The case was stayed by an order entered on June 14, 2021. On September 24, 2021, an individual shareholder filed a lawsuit in the Circuit Court for Henrico County styled Kent v. Precigen, Inc., Case CL21-6349. The Kent action demands inspection of certain books and records of the Company pursuant to Virginia statutory and common law. On April 1, 2022, the ~~court~~Court denied the demurrer and referred the matter to a hearing on the merits. The Company intends to defend the lawsuits vigorously; however, there can be no assurances regarding the ultimate outcome of these lawsuits.

In the course of its business, the Company is involved in litigation or legal matters, including governmental investigations. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of ~~March 31,~~June 30, 2023, the Company does not believe that any such 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.

15. Segments

The Company's CODM assesses the operating performance of and allocates resources for several operating segments using Segment Adjusted EBITDA as a basis. Management believes this financial metric is a key indicator of operating results since it excludes noncash revenues and expenses that are not reflective of the underlying business performance of an individual enterprise. The Company defines Segment Adjusted EBITDA as net income (loss) before (i) interest expense, (ii) income tax expense or benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) loss on settlement agreements where noncash consideration is paid, (vi) adjustments for accrued bonuses paid in equity awards, (vii) gain or loss on disposals of assets, (viii) loss on impairment of goodwill and other noncurrent assets, (ix) equity in net loss of affiliates, and (x) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates, but includes proceeds from the sale of assets in the period sold.

Because the Company uses Segment Adjusted EBITDA as its primary measure of segment performance, it has included this measure in its discussion of segment operating results. The Company has also disclosed revenues from external customers and intersegment revenues for each reportable segment. The CODM does not use total assets by segment to evaluate segment performance or allocate resources, and accordingly, these amounts are not required to be disclosed. The Company's segment presentation excludes amounts related to the operations of Trans Ova which are reported as discontinued operations (Note 3).

For the three and six months ended ~~March 31,~~June 30, 2023, the Company's reportable segments were (i) Biopharmaceuticals and (ii) Exemplar. These identified reportable segments met the quantitative thresholds to be reported separately for the ~~three~~six months ended ~~March 31,~~June 30, 2023. See Note 2 for a description of Biopharmaceuticals. See Note 1 for a description of Exemplar.

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Segment Adjusted EBITDA by reportable segment was as follows:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Biopharmaceuticals	Biopharmaceuticals	$	(20,764)	$	(20,839)		Biopharmaceuticals	$	(17,880)	$	(19,997)	$	(39,277)	$	(40,874)
Exemplar	Exemplar	121		3,558			Exemplar	(83)		795		38		4,353

Segment Adjusted EBITDA for reportable segments	Segment Adjusted EBITDA for reportable segments	$	(20,643)	$	(17,281)		Segment Adjusted EBITDA for reportable segments	$	(17,963)	$	(19,202)	$	(39,239)	$	(36,521)

The table below reconciles Segment Adjusted EBITDA for reportable segments to consolidated net loss from continuing operations before income taxes:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Segment Adjusted EBITDA for reportable segments	Segment Adjusted EBITDA for reportable segments	$	(20,643)	$	(17,281)		Segment Adjusted EBITDA for reportable segments	$	(17,963)	$	(19,202)	$	(39,239)	$	(36,521)
All Other Segment Adjusted EBITDA							All Other Segment Adjusted EBITDA	—		—		—		—
Remove cash paid for capital expenditures, net of proceeds from sale of assets, and cash paid for investments in affiliates							Remove cash paid for capital expenditures, net of proceeds from sale of assets, and cash paid for investments in affiliates	101		172		255		668
Interest Income							Interest Income	828		37		1,461		75

Remove cash paid for capital expenditures, net of proceeds from sale of assets, and cash paid for investments in affiliates		154		496
Add recognition of previously deferred revenue associated with upfront and milestone payments		—		1,446
Other expenses:	Other expenses:						Other expenses:
Interest expense	Interest expense	(324)		(2,038)			Interest expense	(136)		(2,063)		(460)		(4,101)
Depreciation and amortization	Depreciation and amortization	(1,711)		(1,918)			Depreciation and amortization	(1,693)		(1,835)		(3,404)		(3,753)
Loss on disposals of assets		—		—
Gain (loss) on disposals of assets							Gain (loss) on disposals of assets	40		—		40		—
Impairment losses	Impairment losses	—		(482)			Impairment losses	—		(638)		—		(1,120)

Stock-based compensation expense	Stock-based compensation expense	(3,132)		(3,524)			Stock-based compensation expense	(2,188)		(2,279)		(5,320)		(5,803)
Adjustment related to accrued bonuses paid in equity awards	Adjustment related to accrued bonuses paid in equity awards	3,360		1,698			Adjustment related to accrued bonuses paid in equity awards	—		—		3,361		1,698
Equity in net loss of affiliates	Equity in net loss of affiliates	—		(1)			Equity in net loss of affiliates	—		—		—		(1)
Other	Other	—		—			Other	—		(105)		—		(105)
Shares issue for payment of services	Shares issue for payment of services	(545)		(576)			Shares issue for payment of services	—		—		(545)		(576)
Corporate noncash items	Corporate noncash items	52		(265)			Corporate noncash items	627		(203)		678		(468)
Unallocated corporate costs		—		—

Eliminations	Eliminations	—		(1,511)			Eliminations	—		(32)		—		(97)
Consolidated net loss from continuing operations before income taxes	Consolidated net loss from continuing operations before income taxes	$	(22,789)	$	(23,956)		Consolidated net loss from continuing operations before income taxes	$	(20,384)	$	(26,148)	$	(43,173)	$	(50,104)

Revenues by reportable segment were as follows:


		Three Months Ended March 31, 2023							Three Months Ended June 30, 2023
		Biopharmaceuticals		Exemplar		Total			Biopharmaceuticals		Exemplar		Total
Revenues from external customers	Revenues from external customers	$	—	$	1,851	$	1,851	Revenues from external customers	$	—	$	1,767	$	1,767
Intersegment revenues	Intersegment revenues	—		—		—		Intersegment revenues	—		—		—
Total segment revenues	Total segment revenues	$	—	$	1,851	$	1,851	Total segment revenues	$	—	$	1,767	$	1,767

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		Three Months Ended March 31, 2022							Three Months Ended June 30, 2022
		Biopharmaceuticals		Exemplar		Total			Biopharmaceuticals		Exemplar		Total
Revenues from external customers	Revenues from external customers	$	84	$	5,429	$	5,513	Revenues from external customers	$	70	$	2,841	$	2,911
Intersegment revenues	Intersegment revenues	1,446		—		1,446		Intersegment revenues	—		—		—
Total segment revenues	Total segment revenues	$	1,530	$	5,429	$	6,959	Total segment revenues	$	70	$	2,841	$	2,911


	Six Months Ended June 30, 2023
	Biopharmaceuticals		Exemplar		Total
Revenues from external customers	$	—	$	3,618	$	3,618
Intersegment revenues	—		—		—
Total segment revenues	$	—	$	3,618	$	3,618


	Six Months Ended June 30, 2022
	Biopharmaceuticals		Exemplar		Total
Revenues from external customers	$	154	$	8,270	$	8,424
Intersegment revenues	—		—		—
Total segment revenues	$	154	$	8,270	$	8,424

The table below reconciles total segment revenues from reportable segments to total consolidated revenues:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Total segment revenues from reportable segments	Total segment revenues from reportable segments	$	1,851	$	6,959		Total segment revenues from reportable segments	$	1,767	$	2,911	$	3,618	$	8,424

Elimination of intersegment revenues	Elimination of intersegment revenues	—		(1,446)			Elimination of intersegment revenues	—		—		—		—
Total consolidated revenues	Total consolidated revenues	$	1,851	$	5,513		Total consolidated revenues	$	1,767	$	2,911	$	3,618	$	8,424

For the three months ended ~~March 31,~~June 30, 2023 and 2022, ~~35.0%~~73.3% and ~~75.5%~~64.9%, respectively, of total consolidated revenue was attributable to ~~one customer~~four customers in 2023 and two customers in 2022, in the Exemplar segment. For the six months ended June 30, 2023 and 2022, 78.0% and 67.9%, respectively, of total consolidated revenue was attributable to 4 customers in 2023 and 1 in 2022, in the Exemplar segment.

As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company had ~~$2,368~~$2,216 and $2,591, respectively, of long-lived assets in foreign countries. The Company recognized revenues derived in foreign countries totaling $0 and ~~$84~~$70 for the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively, and $0 and $154 for the six months ended June 30, 2023 and 2022, respectively.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the unaudited financial information and the notes thereto included in this Quarterly Report on Form 10-Q, or Quarterly Report, and our Annual Report on Form 10-K for the year ended December 31, 2022, or Annual Report.

The following discussion contains forward-looking statements that reflect our plans, estimates, expectations, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements and you are cautioned not to place undue reliance on forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report, particularly in "Special Note Regarding Forward-Looking Statements" and "Risk Factors." The forward-looking statements included in this Quarterly Report are made only as of the date hereof.

Overview

We are a dedicated discovery and clinical-stage biopharmaceutical company advancing the next generation of gene and cell therapies with the overall goal of improving outcomes for patients with significant unmet medical needs. We are leveraging our proprietary technology platforms to develop product candidates designed to target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases. We have developed an extensive pipeline of therapies across multiple indications within these core focus areas.

We believe that our array of technology platforms uniquely positions us among other biotechnology companies to advance precision medicine. Precision medicine is the practice of therapeutic product development that takes into account specific genetic variations within populations impacted by a disease to design targeted therapies to improve outcomes for a disease or patient population. Our proprietary and complementary technology platforms provide a strong foundation to realize the core promise of precision medicine by supporting our efforts to construct powerful gene programs to drive efficacy, deliver these programs through viral, non-viral, and microbe-based approaches to ~~drive~~maintain lower costs, and control gene expression to ~~drive~~ensure safety. Our therapeutic platforms, including UltraCAR-T, AdenoVerse immunotherapy, and ActoBiotics, are designed to allow us to precisely control the level and physiological location of gene expression and modify biological molecules in order to control the function and output of living cells to treat underlying disease conditions.

We are ~~actively~~ advancing our lead clinical programs, including: PRGN-3005, PRGN-3006 and PRGN-3007, which are built on our UltraCAR-T platform; and PRGN-2009 and PRGN-2012, which are based on our AdenoVerse immunotherapy platform. In addition, we have completed a Phase 1b/2a study of AG019, which is built on our ActoBiotics platform. We also have a robust pipeline of preclinical programs that we are pursuing in order to drive long-term value creation.

We have developed a proprietary electroporation device, UltraPorator, designed to further streamline ~~and ensure~~ the rapid and cost-effective manufacturing of UltraCAR-T therapies. UltraPorator has received U.S. Food and Drug Administration, or FDA, clearance for manufacturing UltraCAR-T cells in clinical trials, and we have been dosing patients with UltraCAR-T cells manufactured with UltraPorator in our UltraCAR-T clinical trials.

We exercise discipline in our portfolio management by systematically evaluating data from our preclinical programs in order to make rapid "go" and "no go" decisions. Through this process, we believe we can more effectively allocate resources to programs that we believe show the most promise and advance such programs to clinical trials.

Our Biopharmaceuticals reportable segment is primarily comprised of the Company's legal entities of Precigen and ActoBio, as well as royalty interests in therapeutics and therapeutic platforms from companies not controlled by us. ~~In addition to human therapeutics,~~Our Exemplar reportable segment is comprised of Exemplar Genetics LLC, doing business as Precigen Exemplar, or Exemplar, is our wholly owned subsidiary ~~which is~~ focused on developing research models and services for healthcare research applications.

Biopharmaceuticals

Precigen

We are developing therapies built on our UltraCAR-T therapeutics platform and our "off-the-shelf" AdenoVerse immunotherapy platform. Through our UltraCAR-T therapeutics platform, we are able to precision-engineer UltraCAR-T cells to produce a homogeneous cell product that simultaneously expresses antigen-specific chimeric antigen receptor, or CAR, kill switch, and our proprietary membrane-bound interleukin-15, or mbIL15, genes in any genetically modified UltraCAR-T cell. Our decentralized and rapid proprietary manufacturing process allows us to manufacture UltraCAR-T cells overnight at a medical center's current good manufacturing practices facility, or cGMP, and reinfuse the patient the following day after gene transfer. This process improves upon current approaches to CAR-T manufacturing, which require extensive ex vivo expansion following viral vector transduction to achieve clinically relevant cell numbers that we believe can result in the exhaustion of

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CAR-T cells prior to their administration, limiting their potential for persistence in patients. We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies. The UltraPorator system includes proprietary hardware and software solutions and potentially represents major advancements over current electroporation devices by significantly reducing the processing time and contamination risk. UltraPorator is intended to be a viable scale-up and commercialization solution for decentralized UltraCAR-T manufacturing. Our AdenoVerse immunotherapy platform utilizes a library of proprietary adenovectors for the efficient gene delivery of therapeutic effectors, immunomodulators, and vaccine antigens. We have established proprietary manufacturing cell lines and production methodologies from our AdenoVerse immunotherapy platform, which we believe are easily scalable for commercial supply. We believe that our proprietary gorilla adenovectors, part of the AdenoVerse technology, have superior performance characteristics as compared to current competition, including standard human adenovirus serotype 5, rare human adenovirus types and other non-human primate adenovirus types.

~~The~~Our most advanced programs are as follows:

PRGN-2012 is a first-in-class, investigational "off-the-shelf" AdenoVerse immunotherapy for the treatment of recurrent respiratory papillomatosis, or RRP. PRGN-2012 is an innovative therapeutic vaccine with optimized antigen design that uses our gorilla adenovector technology, part of our proprietary AdenoVerse platform, to elicit immune responses directed against cells infected with HPV type 6 and HPV type 11. PRGN-2012 is in a Phase 1/2 clinical trial for adult patients with RRP. This clinical trial is being conducted in collaboration with the Center for Cancer Research at the NCI pursuant to a CRADA. We have completed the Phase 1 clinical trial. The Phase 2 clinical trial is ongoing. PRGN-2012 has been granted Breakthrough Therapy Designation for the treatment of RRP by the FDA. Previously, PRGN-2012was granted Orphan Drug designation by the FDA.

PRGN-2009 is a first-in-class, "off-the-shelf" investigational immunotherapy designed to activate the immune system to recognize and target human papillomavirus-positive, or HPV+, solid tumors. PRGN-2009 leverages our UltraVector and AdenoVerse platforms to optimize HPV type 16 and HPV type 18, antigen designed for delivery via a proprietary gorilla adenovector with a large genetic payload capacity and the ability for repeat administrations. We have completed a Phase 1 clinical trial of PRGN-2009 as a monotherapy or in combination with bintrafusp alfa, or M7824, an investigational bifunctional fusion protein, for patients with HPV-associated cancers in collaboration with the National Cancer Institute, or NCI, pursuant to a cooperative research and development arrangement, or CRADA. A Phase 2 clinical trial of PRGN-2009 in newly diagnosed oropharyngeal squamous cell carcinoma patients is ongoing in collaboration with the NCI pursuant to a CRADA. In addition, we have received FDA clearance of an IND to initiate a Phase 2 clinical trial of PRGN-2009 in combination with pembrolizumab to treat patients with recurrent or metastatic cervical cancer.

PRGN-3006 is a first-in-class, investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to express a CAR to target CD33 (Siglec-3), mbIL15 and akill switch gene. PRGN-3006 is currently being evaluated in a Phase 1/1b clinical trial for the treatment of relapsed or refractory, or r/r, acute myeloid leukemia, or AML, and high-risk myelodysplastic syndromes, or MDS. PRGN-3006 has been granted Fast Track designation in patients with r/r AML by the FDA. Previously PRGN-3006 was granted Orphan Drug Designation in patients with AML by the FDA. We have completed the Phase 1 dose escalation trial. The Phase 1b dose expansion trial is ongoing where PRGN-3006 is being evaluated following lymphodepletion.

PRGN-3005 is a first-in-class, investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to simultaneously express a CAR targeting the unshed portion of the Mucin 16 antigen, mbIL15, and kill switch genes. PRGN-3005 is currently being evaluated in a Phase 1/1b clinical trial for the treatment of advanced, recurrent platinum-resistant ovarian , fallopian tube, or primary peritoneal cancer. We have completed enrollment in the Phase 1 dose escalation cohorts of the intraperitoneal (IP) and intravenous (IV) arms without lymphodepletion as well as in the lymphodepletion cohort in the IV arm and initiated Phase 1b expansion clinical trial.

~~PRGN-3006 is a first-in-class, investigational autologous CAR-T therapy that utilizes our UltraCAR-T platform to express a CAR to target CD33 (Siglec-3), mbIL15 and a~~kill switch gene. PRGN-3006 is currently being evaluated in a Phase 1/1b clinical trial for the treatment of relapsed or refractory, or r/r, acute myeloid leukemia, or AML, high-risk myelodysplastic syndromes, or MDS, and chronic myelomonocytic leukemia, or CMML. PRGN-3006 has been granted Fast Track designation in patients with r/r AML by the FDA. ~~Previously~~ PRGN-3006 was granted Orphan Drug Designation in patients with AML by the FDA. We have completed the Phase 1 dose escalation study. Phase 1b dose expansion trial is ongoing where PRGN-3006 is being evaluated following lymphodepletion.

PRGN-3007 is a first-in-class, investigational autologous CAR-T therapy that utilizes the next generation UltraCAR-T platform to express a CAR ~~to target~~which targets ROR1, mbIL15, a kill switch, and a novel mechanism for the intrinsic blockade of the programmed death 1, or PD-1, gene expression. PRGN-3007 is being evaluated in a Phase 1/1b clinical trial for patients with advanced receptor tyrosine kinase-like orphan receptor 1-positive, or ROR1+, hematological (Arm 1) and solid tumors (Arm 2). The target patient population for Arm 1 includes relapsed or refractory CLL, relapsed or refractory MCL, relapsed or refractory B-ALL, and relapsed or refractory DLBCL. The target patient population for Arm 2 includes locally advanced unresectable or metastatic histologically confirmed TNBC Arm 1 and Arm 2 will enroll in parallel. The study is ~~enrolling~~designed to enroll in two parts: an initial 3+3 dose escalation in each arm followed by a dose expansion at the maximum tolerated dose.

PRGN-2012 is a first-in-class, investigational "off-the-shelf" AdenoVerse immunotherapy for the treatment of recurrent respiratory papillomatosis, or RRP. PRGN-2012 is an innovative therapeutic vaccine with optimized antigen design that uses our gorilla adenovector technology, part of our proprietary AdenoVerse platform, to elicit immune responses directed against cells infected with HPV type 6 and HPV type 11. PRGN-2012 is in a Phase 1/2 clinical trial for adult patients with RRP. PRGN-2012 is being developed in collaboration with the Center for Cancer Research at the NCI pursuant to a CRADA. We have completed the The Phase 1 ~~clinical trial. Phase 2 clinical~~dose escalation trial is ongoing. ~~PRGN-2012has been granted Orphan Drug designation for treatment of RRP by the FDA.~~

In addition to our clinical programs, we have a robust pipeline of preclinical programs in order to drive long-term value creation. Our pipeline includes product candidates based on UltraCAR-T and "off-the-shelf" AdenoVerse immunotherapy therapeutic platforms. We expect to continue development of a number of potential product candidates in our preclinical pipeline to identify product candidates for evaluation in clinical trials.

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Precigen ActoBio, Inc.

ActoBio is pioneering a proprietary class of microbe-based biopharmaceuticals, referred to as ActoBiotics, that enable expression and local delivery of disease-modifying therapeutics. Our ActoBiotics platform is a unique delivery platform precisely tailored for specific disease modification with the potential for superior efficacy and safety. ActoBiotics combine the advantages of highly selective protein-based therapeutic agents with local delivery by the well-characterized, ~~and~~ food-grade bacterium Lactococcus lactis, or L. lactis. ActoBiotics can be delivered orally in a capsule, through an oral rinse, or in a topical solution. We believe ActoBiotics have the potential to provide superior safety and efficacy ~~via~~through the sustained release of appropriate quantities of select therapeutic agents as compared to injectable biologics, while reducing the side effects commonly attributed to systemic delivery and corresponding peaks in concentration. ActoBiotics work via genetically modified bacteria ~~that~~which deliver proteins and peptides at mucosal sites, rather than the insertion of one or more genes into a human cell by means of a virus or other delivery mechanism. By foregoing this insertion, ActoBiotics ~~allow~~enable "gene therapy" without the need for cell transformation.

ActoBio's most advanced internal pipeline candidate, AG019, is a first-in-class disease modifying antigen-specific, investigational immunotherapy for the prevention, delay, or reversal of type 1 diabetes mellitus, or T1D. AG019 is an easy-to-take capsule formulation of ActoBiotics engineered to deliver ~~the~~ autoantigen human proinsulin, or hPINS, and the tolerance-enhancing cytokine human interleukin-10 to the mucosal lining of gastro-intestinal tissues in patients with T1D. We have completed a Phase 1b/2a clinical trial of AG019 for the treatment of early-onset T1D. The Phase 1b portion of the study evaluated the safety and tolerability of AG019 monotherapy administered both as a single dose and as repeated daily doses in adult and adolescent patients. The Phase 2a double-blind portion of the study investigated the safety and tolerability of AG019 in combination with teplizumab, or PRV-031. The primary endpoint of assessing safety and tolerability in both the Phase 1b AG019 monotherapy and the Phase 2a AG019 combination therapy has been met. AG019 was well-tolerated when administered to adults and adolescents either as monotherapy or in combination with teplizumab. A single 8-week treatment cycle of oral AG019 as a monotherapy and in combination with teplizumab showed stabilization or increase of C-peptide levels during the first 6 months post treatment initiation in recent-onset T1D.

Third Party Licenses

We previously entered into a collaboration with Castle Creek Biosciences, Inc., or Castle Creek, to advance certain product candidates. Pursuant to the collaboration, we licensed our technology platforms to Castle Creek for use in certain specified fields, and in exchange, we received and were entitled to certain access fees, milestone payments, royalties, and sublicensing fees related to the development and commercialization of product candidates. In March 2020, we and Castle Creek terminated the original collaboration agreement by mutual agreement, with the parties agreeing that certain product candidates would be treated as "Retained Products" under the terms of the original agreement. Castle Creek retains a license to continue to develop and commercialize the Retained Products within the field of use for so long as Castle Creek continues to pursue such development and ~~commercialization, and~~commercialization; we are also entitled to certain royalties with respect to the Retained Products. One such Retained Product is D-Fi (debcoemagene autoficel), formerly designated FCX-007, for the treatment of recessive dystrophic epidermolysis bullosa, or RDEB.

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~~and by enabling the production of cells and organs in its genetically engineered swine for regenerative medicine applications. Historically, researchers have lacked animal models that faithfully represent human diseases. As a result, a sizeable barrier has blocked progress in the discovery of human disease mechanisms; novel diagnostics, procedures, devices, prevention strategies and therapeutics; ~~and~~as well as the ability to predict in humans the efficacy of ~~those~~ next-generation procedures, devices, and therapeutics. Exemplar's MiniSwine models are genetically engineered to exhibit a wide variety of human disease states, which provides a more accurate platform to test the efficacy of new medications and devices.

Discontinued Operations

In August 2022, Precigen completed the sale of 100% of the issued and outstanding 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.

See also "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 3" appearing elsewhere in this Quarterly Report for additional discussion of our discontinued operations.

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Segments

As of ~~March 31,~~June 30, 2023, our reportable segments were (i) Biopharmaceuticals and (ii) Exemplar. These identified reportable segments met the quantitative thresholds to be reported separately for the ~~three~~six months ended ~~March 31,~~June 30, 2023.

Prior to January 1, 2023, corporate expenses, were not allocated to the segments and were managed at a consolidated level. Corporate expenses, include costs associated with general and administrative functions, including the Company's finance, accounting, legal, human resources, information technology, corporate communication, 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 as well as dividend income. Beginning in the first quarter of 2023, we began allocating certain corporate expenses to one of the reporting units within the Biopharmaceuticals reportable segment. As presented in Note 15 to the Condensed Consolidated Financial Statements (Unaudited) appearing elsewhere in this Quarterly Report, the prior year period has been reclassified to conform to the current period’s presentation.

Financial overview

We have incurred significant losses since our inception. We anticipate that we may continue to incur significant losses for the foreseeable future, and we may never achieve or maintain profitability. Our historical collaboration and licensing revenues were generated under a business model from which we have gradually transitioned, and we do not expect to expend significant resources servicing our historical collaborations in the future. We may enter into strategic transactions for individual platforms or programs in the future from which we may generate new collaboration and licensing revenues. We continue to generate product and service revenues through our Exemplar subsidiary, and in the ~~three~~six months ended ~~March 31,~~June 30, 2023, it produced positive Segment Adjusted EBITDA. Products currently in our clinical pipeline will require regulatory approval and/or commercial scale-up before they may commence significant product sales and operating profits.

As we continue our efforts to focus our business and generate additional capital, we may be willing to enter into transactions involving one or more of our operating segments and reporting units for which we have goodwill and intangible assets. These efforts could result in us identifying impairment indicators or recording impairment charges in future periods. In addition, market changes and changes in judgements, assumptions, and estimates that we have made in assessing the fair value of goodwill could cause us to consider some portion or all of certain assets to become impaired.

Sources of revenue

Although we have generated revenue in the past from collaboration agreements, our primary current revenues arise from Exemplar, which generates product and service revenues through the development and sale of genetically engineered miniature swine models. We recognize revenue when control of the promised product or service is transferred to the customer.

As we have shifted our focus to our healthcare business, we have and may continue to mutually terminate historical collaboration agreements or repurchase rights to the exclusive fields from collaborators, relieving us of any further performance obligations under the agreement. Upon such circumstances or when we determine no further performance obligations are required of us under an agreement, we may recognize any remaining deferred revenue as either collaboration revenue or as a reduction of operating expense, depending on the circumstances. See "Notes to the Consolidated Financial Statements (Unaudited) - Note 4" appearing elsewhere in this Quarterly Report for a discussion of changes to our significant collaborations.

In future periods, in connection with our focus on healthcare, our revenues will primarily depend on our ability to advance and create our own programs and the extent to which we bring products enabled by our technologies to market. Other than for collaboration revenues recognized upon cancellation or modification of an existing collaboration or for revenues generated pursuant to future strategic transactions for any of our existing platforms or programs, we expect our collaboration revenues will continue to decrease in the near term, although if any new collaboration agreements or strategic transactions are entered into, revenue could be positively impacted . Our revenues will also depend upon our ability to maintain or improve the volume and pricing of Exemplar's current product and service offerings and to develop and scale up production of new offerings from the various technologies of ~~our subsidiaries.~~Exemplar. As we focus on our healthcare business, we anticipate that our expenses will increase substantially if, and as, we continue to advance the preclinical and clinical development of our existing product candidates and our research programs. We expect a significant period of time could pass before commercialization of our various product candidates or before the achievement of contractual milestones and the realization of royalties on product candidates commercialized under our collaborations. Accordingly, there can be no assurance as to the timing, magnitude, and predictability of revenues, if any, to which we might be entitled.

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Cost of products and services

Cost of products and services, all which are related to our Exemplar reporting segment, includes primarily labor and related costs, drugs and supplies, feed used in production, and facility charges, including rent and depreciation. Fluctuations in the price of livestock and feed have not had a significant impact on our operating margins and no derivative financial instruments are used to mitigate the price risk.

Research and development expenses

We recognize research and development expenses as they are incurred. Our research and development expenses consist primarily of:

•salaries and benefits, including stock-based compensation expense, for personnel in research and development functions;

•fees paid to consultants and contract research organizations who perform research on our behalf and under our direction;

•costs related to laboratory supplies used in our research and development efforts and acquiring, developing, and manufacturing preclinical study and clinical trial materials;

•costs related to certain in-licensed technology rights or in-process research and development;

•amortization of patents and related technologies acquired in mergers and acquisitions; and

•facility-related expenses, which include direct depreciation costs and unallocated expenses for rent and maintenance of facilities and other operating costs.

Our research and development expenses are generally incurred by our reportable segments and primarily relate to either costs incurred to expand or otherwise improve our technologies or the costs incurred to develop our own products and services. Our Biopharmaceuticals segment is progressing preclinical and clinical programs that target urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases, including PRGN-3005, PRGN-3006, PRGN-3007, PRGN-2009, and PRGN-2012 and AG019. Our Exemplar segment's research and development activities relate to new and improved pig research models. The following table summarizes our research and development expenses incurred by reportable segment and reconciles those expenses to research and development expenses on the condensed consolidated statements of operations for the three and six months ended ~~March 31,~~June 30, 2023 and 2022.


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022				2023		2022		2023		2022
Biopharmaceuticals	Biopharmaceuticals	$	12,097	$	11,718		Biopharmaceuticals	$	11,797	$	11,879	$	23,894	$	23,597
Exemplar	Exemplar	66		83			Exemplar	77		75		143		158

Total consolidated research and development expenses	Total consolidated research and development expenses	$	12,163	$	11,801		Total consolidated research and development expenses	$	11,874	$	11,954	$	24,037	$	23,755

The amount of research and development expenses may be impacted by, among other things, the number and nature of our own proprietary programs, and the number and size of programs we may support on behalf of collaboration agreements. We expect that our research and development expenses will increase as we continue to develop our own proprietary programs, including progression of these programs into preclinical and clinical stages. We believe these increases will likely include increased costs paid to consultants and contract research organizations and increased costs related to laboratory supplies.

Research and development expenses may also increase as a result of in-licensing of technologies or ongoing research and development operations that we might assume through mergers and acquisitions.

Selling, general and administrative expenses

Selling, general and administrative, or SG&A, expenses consist primarily of salaries and related costs, including stock-based compensation expense, for employees in executive, operational, finance, information technology, legal, and corporate

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communications functions. Other significant SG&A expenses include rent and utilities, insurance, accounting, and legal services (including the cost of settling any claims and lawsuits), and expenses associated with obtaining and maintaining our intellectual property.

SG&A expenses may fluctuate in the future depending on the scaling of our corporate functions required to support our corporate initiatives and the outcomes of legal claims and assessments against us.

Other income (expense), net

Other income consists of interest earned on our cash and cash equivalents and short-term and long-term investments and may

fluctuate based on amounts invested and current interest rates.

Other expense consists primarily of interest on our Convertible Notes, which decreased in ~~2022~~2023 due ~~redemption of a portion~~to retirements of our Convertible Notes. See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 9" appearing elsewhere in this Quarterly Report for further discussion.

Equity in net loss of affiliates

Equity in net income or loss of affiliates is our pro-rata share of our equity method investments' operating results, adjusted for accretion of basis difference. We account for investments in our JVs using the equity method of accounting since we have the ability to exercise significant influence, but not control, over the operating activities of these entities.

Segment performance

We use Segment Adjusted EBITDA as our primary measure of segment performance. We define Segment Adjusted EBITDA as net income (loss) before (i) interest expense, (ii) income tax expense or benefit, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) loss on settlement agreements where noncash consideration is paid, (vi) adjustments for accrued bonuses paid in equity awards, (vii) gain or loss on disposals of assets, (viii) loss on impairment of goodwill and other noncurrent assets, (ix) equity in net loss of affiliates, and (x) recognition of previously deferred revenue associated with upfront and milestone payments as well as cash outflows from capital expenditures and investments in affiliates, but includes proceeds from the sale of assets in the period sold. See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 15" appearing elsewhere in this Quarterly Report for further discussion of Segment Adjusted EBITDA.

Results of operations

Comparison of the three months ended ~~March 31,~~June 30, 2023 and the three months ended ~~March 31,~~June 30, 2022

The following table summarizes our results of operations for the three months ended ~~March 31,~~June 30, 2023 and 2022, together with the changes in those items in dollars and as a percentage:

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		Three Months Ended March 31,				Dollar Change		Percent Change			Three Months Ended June 30,				Dollar Change		Percent Change
		2023		2022							2023		2022
		(In thousands)									(In thousands)
Revenues	Revenues									Revenues

Product revenues	Product revenues	$	324	492		$	(168)	(34.1)	%	Product revenues	$	324	621		$	(297)	(47.8)	%
Service revenues	Service revenues	1,527		4,933		(3,406)		(69.0)	%	Service revenues	1,438		2,213		(775)		(35.0)	%
Other revenues	Other revenues	—		88		(88)		(100.0)	%	Other revenues	5		77		(72)		(93.5)	%
Total revenues	Total revenues	1,851		5,513		(3,662)		(66.4)	%	Total revenues	1,767		2,911		(1,144)		(39.3)	%
Operating expenses	Operating expenses									Operating expenses

Cost of product and services	Cost of product and services	1,527		1,694		(167)		(9.9)	%	Cost of product and services	1,697		1,811		(114)		(6.3)	%
Research and development	Research and development	12,163		11,801		362		3.1	%	Research and development	11,874		11,954		(80)		(0.7)	%
Selling, general and administrative	Selling, general and administrative	11,639		13,689		(2,050)		(15.0)	%	Selling, general and administrative	9,316		12,670		(3,354)		(26.5)	%
Impairment of goodwill		—		482		(482)		(100.0)	%

Impairment of other noncurrent assets										Impairment of other noncurrent assets	—		638		(638)		(100.0)	%
Total operating expenses	Total operating expenses	25,329		27,666		(2,337)		(8.4)	%	Total operating expenses	22,887		27,073		(4,186)		(15.5)	%
Operating loss	Operating loss	(23,478)		(22,153)		(1,325)		6.0	%	Operating loss	(21,120)		(24,162)		3,042		(12.6)	%
Total other income (expense), net	Total other income (expense), net	689		(1,802)		2,491		138.2	%	Total other income (expense), net	736		(1,986)		2,722		137.1	%
Equity in net loss of affiliates		—		(1)		1		(100.0)	%

Loss from continuing operations before income taxes	Loss from continuing operations before income taxes	(22,789)		(23,956)		1,167		(4.9)	%	Loss from continuing operations before income taxes	(20,384)		(26,148)		5,764		(22.0)	%
Income tax benefit	Income tax benefit	55		58		(3)		(5.2)	%	Income tax benefit	65		89		(24)		(27.0)	%
Loss from continuing operations	Loss from continuing operations	(22,734)		(23,898)		1,164		(4.9)	%	Loss from continuing operations	(20,319)		(26,059)		5,740		(22.0)	%
Income from discontinued operations, net of income taxes (1)	Income from discontinued operations, net of income taxes (1)	—		4,647		(4,647)		(100.0)	%	Income from discontinued operations, net of income taxes (1)	—		8,424		(8,424)		(100.0)	%

Net loss	Net loss	$	(22,734)	$	(19,251)	$	(3,483)	18.1	%	Net loss	$	(20,319)	$	(17,635)	$	(2,684)	15.2	%

(1)See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 3" appearing elsewhere in this Quarterly Report.

Revenues and gross margin

Revenues decreased ~~$3.7~~$1.1 million, or ~~66%~~39%, from the three months ended ~~March 31,~~June 30, 2022. This decrease related to the recognition of revenue in the first quarter of 2022 related to agreements for which revenue was previously deferred that did not occur in the first quarter of 2023 of $1.0 million, as well as declinesreductions in services performed ~~resulting from a lower demand from existing customers~~ at Exemplar. Gross margin on product and ~~service~~services declined in the current period primarily as a result of the decreased revenues, ~~and an increase~~with a smaller impact due to increases in salaries, benefits, and other personnel costs at Exemplar.

Research and development expenses

Research and development expenses ~~increased $0.4~~decreased $0.1 million, or 3%1%, compared to the three months ended ~~March 31,~~June 30, 2022. This ~~increase~~decrease was primarily driven by ~~a continued prioritization of clinical product candidates.~~less expense incurred related to preclinical research programs for the comparable period.

Selling, general and administrative expenses

SG&A expenses decreased ~~$2.1~~$3.4 million, or ~~15%~~27%, compared to the three months ended ~~March 31,~~June 30, 2022. This decrease was primarily driven by a reduction in professional fees of ~~$2.0~~$2.2 million, due to decreased legal fees associated with certain litigation ~~matters.~~matters, as well as a $1.1 million reduction in salaries, benefits, and other personnel costs due to reduced head count.

Total other income (expense), net

Total other income, net, increased ~~$2.5~~$2.7 million compared to the three months ended ~~March 31,~~June 30, 2022. This is primarily due to reduced interest expense associated with our Convertible Notes issued July 2018 as they ~~have been mostly~~were retired in the second quarter of 2023, and increased interest income due to higher interest rates on our investments.

Segment performance

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~~Segment performance~~

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the three months ended ~~March 31,~~June 30, 2023 and 2022, for each of our reportable ~~segments as well as unallocated corporate costs.~~segments.


		Three Months Ended March 31,				Dollar Change		Percent Change			Three Months Ended June 30,				Dollar Change		Percent Change
		2023		2022							2023		2022
		(In thousands)									(In thousands)
Segment Adjusted EBITDA:	Segment Adjusted EBITDA:									Segment Adjusted EBITDA:
Biopharmaceuticals	Biopharmaceuticals	$	(20,764)	$	(20,839)	$	75	0.4	%	Biopharmaceuticals	$	(17,880)	$	(19,997)	$	2,117	10.6	%
Exemplar	Exemplar	121		3,558		(3,437)		(96.6)	%	Exemplar	(83)		795		(878)		(110.4)	%

For a reconciliation of Segment Adjusted EBITDA to net loss from continuing operations before income taxes, see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 15" appearing elsewhere in this Quarterly Report.

The following table summarizes revenues from external customers for the three months ended ~~March 31,~~June 30, 2023 and 2022, for each of our reportable segments.


		Three Months Ended March 31,				Dollar Change		Percent Change			Three Months Ended June 30,				Dollar Change		Percent Change
		2023		2022							2023		2022
		(In thousands)									(In thousands)
Biopharmaceuticals	Biopharmaceuticals	$	—	$	84	$	(84)	(100.0)	%	Biopharmaceuticals	$	—	$	70	$	(70)	(100.0)	%
Exemplar	Exemplar	1,851		5,429		(3,578)		(65.9)	%	Exemplar	1,767		2,841		(1,074)		(37.8)	%

Biopharmaceuticals

Segment Adjusted EBITDA increased primarily due to our reduction in Selling, general and administrative expenses within the reportable segment.

Exemplar

Revenues for Exemplar decreased due to a decrease in services performed resulting from a lower demand from existing customers. The decline in Segment Adjusted EBITDA was primarily due to the decreased revenues.

Comparison of the six months ended June 30, 2023 and the six months ended June 30, 2022

The following table summarizes our results of operations for the six months ended June 30, 2023 and 2022, together with the changes in those items in dollars and as ~~we had~~a percentage:

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	Six Months Ended June 30,				Dollar Change		Percent Change
	2023		2022
	(In thousands)
Revenues

Product revenues	$	648	1,113		$	(465)	(41.8)	%
Service revenues	2,965		7,146		(4,181)		(58.5)	%
Other revenues	5		165		(160)		(97.0)	%
Total revenues	3,618		8,424		(4,806)		(57.1)	%
Operating expenses

Cost of product and services	3,224		3,505		(281)		(8.0)	%
Research and development	24,037		23,755		282		1.2	%
Selling, general and administrative	20,954		26,359		(5,405)		(20.5)	%
Impairment of goodwill	—		482		(482)		(100.0)	%
Impairment of other noncurrent assets	—		638		(638)		(100.0)	%
Total operating expenses	48,215		54,739		(6,524)		(11.9)	%
Operating loss	(44,597)		(46,315)		1,718		(3.7)	%
Total other income (expense), net	1,424		(3,788)		5,212		137.6	%
Equity in net loss of affiliates	—		(1)		1		(100.0)	%
Loss from continuing operations before income taxes	(43,173)		(50,104)		6,931		(13.8)	%
Income tax benefit	120		147		(27)		(18.4)	%
Loss from continuing operations	(43,053)		(49,957)		6,904		(13.8)	%
Income from discontinued operations, net of income taxes (1)	—		13,071		(13,071)		(100.0)	%
Net loss	$	(43,053)	$	(36,886)	$	(6,167)	16.7	%

(1)See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 3" appearing elsewhere in this Quarterly Report.

Revenues and gross margin

Revenues decreased $4.8 million, or 57.1%, from the six months ended June 30, 2022. This decrease primarily related to reductions in services performed at Exemplar as well as the recognition of revenue in the first quarter of 2022 related to agreements for which revenue was previously deferred that did not occur in 2023 of $1.0 million at Exemplar. Gross margin on product and service declined in the current period primarily as a result of the decreased revenues, with a smaller impact due to increases in salaries, benefits, and other personnel costs at Exemplar.

Research and development expenses

Research and development expenses increased ~~costs~~$0.3 million, or 1.2%, compared to the six months ended June 30, 2022. This increase was primarily driven by a continued prioritization of clinical product candidates.

Selling, general and administrative expenses

SG&A expenses decreased $5.4 million, or 20.5%, compared to the six months ended June 30, 2022. This decrease was primarily driven by a reduction in professional fees of $4.2 million, due to decreased legal fees associated with certain litigation matters, as well as a $1.1 million reduction in salaries, benefits, and other personnel costs due to reduced head count.

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Total other income (expense), net

Total other income, net, increased $5.2 million compared to the ~~advancement~~six months ended June 30, 2022. This is primarily due to reduced interest expense associated with our Convertible Notes issued July 2018 as they were retired in the second quarter of 2023, and increased interest income due to higher interest rates on our investments.

Segment performance

The following table summarizes Segment Adjusted EBITDA, which is our primary measure of segment performance, for the six months ended June 30, 2023 and 2022.


	Six Months Ended June 30,				Dollar Change		Percent Change
	2023		2022
	(In thousands)
Segment Adjusted EBITDA:
Biopharmaceuticals	$	(39,277)	$	(40,874)	$	1,597	3.9	%
Exemplar	38		4,353		(4,315)		(99.1)	%

The following table summarizes revenues from external customers for the six months ended June 30, 2023 and 2022, for each of our ~~clinical~~reportable segments.


	Six Months Ended June 30,				Dollar Change		Percent Change
	2023		2022
	(In thousands)
Biopharmaceuticals	$	—	$	154	$	(154)	(100.0)	%
Exemplar	3,618		8,270		(4,652)		(56.3)	%

Biopharmaceuticals

Segment Adjusted EBITDA increased primarily as a result of a reduction of Selling, general and ~~preclinical programs.~~administrative expenses partially offset by a higher adjustment related to bonuses settled in equity awards in 2023 and other segment EBITDA adjustments.

Exemplar

Liquidity and capital resources

Sources of liquidity

We have incurred losses from operations since our inception, and as of ~~March 31,~~June 30, 2023, we had an accumulated deficit of $1.9 billion. From our inception through ~~March 31,~~June 30, 2023, we have funded our operations principally with proceeds received from private and public equity and debt offerings, cash received from our collaborators, and through product and service sales made directly to customers. As of ~~March 31,~~June 30, 2023, we had cash and cash equivalents of ~~$9.7~~$16.5 million and short-term and long-term investments of ~~$101.8~~$79.0 million. ~~We also had restricted cash of $13.8 million at March 31, 2023. This cash is restricted for the permitted purposes related to our Convertible Notes, including the resolution of such notes.~~ Cash in excess of immediate requirements is typically invested primarily in money market funds, certificate of deposits and U.S. government debt securities in order to maintain liquidity and preserve capital.

In January 2023, we closed a public offering of 43,962,640 shares of our common stock, resulting in net proceeds to us of $72.8 million, after deducting underwriting discounts, fees, and other ~~underwriting~~offering expenses.

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Cash flows

The following table sets forth the significant sources and uses of cash for the periods set forth below:


		Three Months Ended March 31,					Six Months Ended June 30,
		2023		2022			2023		2022
		(In thousands)					(In thousands)
Net cash provided by (used in):	Net cash provided by (used in):					Net cash provided by (used in):
Operating activities	Operating activities	$	(18,388)	$	(18,783)	Operating activities	$	(34,156)	$	(25,836)
Investing activities	Investing activities	(50,408)		16,568		Investing activities	(26,905)		33,141
Financing activities	Financing activities	44,174		(163)		Financing activities	29,589		(276)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(28)		(230)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(172)		(471)
Net decrease in cash, cash equivalents, and restricted cash	Net decrease in cash, cash equivalents, and restricted cash	$	(24,650)	$	(2,608)	Net decrease in cash, cash equivalents, and restricted cash	$	(31,644)	$	6,558

Cash flows from operating activities:

During the ~~three~~six months ended ~~March 31,~~June 30, 2023, our net loss was ~~$22.7~~$43.1 million, which includes the following significant noncash expenses totaling ~~$5.3~~$9.2 million: (i) ~~$3.1~~$5.3 million of stock-based compensation expense, (ii) ~~$1.7~~$3.4 million of depreciation and amortization expense, and (iii) $0.5 million of shares issued as payment for services.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, our net loss was ~~$19.3~~$36.9 million, which includes the following significant noncash expenses totaling ~~$8.3~~$14.7 million from both continuing and discontinued operations: (i) ~~$3.6~~$5.9 million of stock-based compensation expense, (ii) ~~$3.3~~$6.5 million of depreciation and amortization expense, (iii) ~~$0.3~~$0.6 million accretion of debt discount and amortization of deferred financing costs, (iv) $0.6 million of shares issued as payment for services, and (vi) ~~$0.5~~$1.1 million of ~~goodwill impairment.~~asset impairments.

Our cash outflows from operations during the ~~three~~six months ended ~~March 31,~~June 30, 2023 were ~~$0.4~~$8.3 million lower than the ~~three~~six months ended ~~March 31,~~June 30, 2022 primarily due ~~the settlement in 2023 of previously accrued short-term incentive bonuses in stock awards whereas the majority of our 2021 short-term incentive bonuses were paid in~~ to decreased cash ~~in the first quarter of 2022.~~inflows provided by Trans Ova and Exemplar.

Cash flows from investing activities:

During the ~~three~~six months ended ~~March 31,~~June 30, 2023, we purchased ~~$50.3~~$26.7 million of investments, net of sales and maturities, primarily using the proceeds received from the underwritten public offering discussed below under cash flows from financing activities.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, we received proceeds of ~~$18.0~~$36.0 million related to the sale and maturity of ~~investments.~~investments, partially offset by $3.3 million of purchases of property plant and equipment primarily in Trans Ova.

Cash flows from financing activities:

During the ~~three~~six months ended ~~March 31,~~June 30, 2023, we received ~~$73.5~~$72.8 million proceeds from the sale of our common stock in an underwritten public offering and retired ~~$29.3~~$43.1 million of our Convertible Notes using restricted cash.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, we made payments of long-term debt of ~~$0.2~~$0.3 million .

Future capital requirements

We believe our existing liquid assets will enable us to fund our operating expenses and capital requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including:

•progress in our research and development programs, as well as the magnitude of these programs;

•~~any delays or potential delays to our clinical trials as a result of the COVID-19 pandemic;~~

•the timing of regulatory approval of our product candidates and those of our collaborations;

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•the timing, receipt, and amount of any payments received in connection with strategic transactions;

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•the timing, receipt, and amount of upfront, milestone, and other payments, if any, from present and future collaborators, if any;

•the timing, receipt, and amount of sales and royalties, if any, from our product candidates;

•the timing and capital requirements to scale up our various product candidates and service offerings and customer acceptance thereof;

•our ability to maintain and establish additional collaborative arrangements and/or new strategic initiatives;

•the resources, time, and cost required for the preparation, filing, prosecution, maintenance, and enforcement of our intellectual property portfolio;

•strategic mergers and acquisitions, if any, including both the upfront acquisition cost as well as the cost to integrate, maintain, and expand the strategic target;

•the costs associated with legal activities, including litigation, arising in the course of our business activities and our ability to prevail in any such legal disputes; and

•the effects, duration, and severity of the ongoing COVID-19 pandemic and the actions we have taken or may take in response, any of which could significantly impact our business, operations, and financial results.

Until such time, if ever, as we can regularly generate positive operating cash flows, we plan to finance our cash needs through a combination of equity offerings, debt financings, government, or other third-party funding, strategic alliances, sales of assets, and licensing arrangements. We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common shareholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common shareholders. Our current stock price may make it more difficult to pursue equity financings and lead to substantial dilution if the price of our common stock does not increase. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we raise additional funds through strategic transactions, collaborations, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or to grant licenses on terms that may not be favorable to us.

We are subject to a number of risks similar to those of other companies conducting high-risk, early-stage research and development of 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 product candidates. Our success is dependent upon our ability to continue to raise additional capital in order to fund ongoing research and development, adequately satisfy or renegotiate long-term debt obligations, obtain regulatory approval of our products, successfully commercialize our products, generate revenue, meet our obligations, and, ultimately, attain profitable operations.

See the section entitled "Risk Factors" in our Annual Report for additional risks associated with our substantial capital requirements.

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Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments from continuing operations as of ~~March 31,~~June 30, 2023 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:


		Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years			Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years
		(In thousands)											(In thousands)
Operating leases	Operating leases	$	11,066	$	2,055	$	4,982	$	2,182	$	1,847	Operating leases	$	11,002	$	2,235	$	3,803	$	2,485	$	2,479

Convertible debt (1)		13,845		13,845		—		—		—
Cash interest payable on convertible debt		242		242		—		—		—

Total	Total	$	25,153	$	16,142	$	4,982	$	2,182	$	1,847	Total	$	11,002	$	2,235	$	3,803	$	2,485	$	2,479

(1)See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Notes 9" appearing elsewhere in this Quarterly Report for further discussion of our convertible debt.

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In addition to the obligations in the table above, as of ~~March 31,~~June 30, 2023, we are party to license agreements with various third parties that contain future milestones and royalty payment obligations related to development milestones and/or commercial sales of products that incorporate or use their technologies. Because these agreements are generally subject to termination by us or are dependent on certain condition precedents within our control, no amounts are included in the tables above. As of ~~March 31,~~June 30, 2023, we also had research and development commitments with third parties totaling ~~$18.2~~$19.5 million that had not yet been incurred.

Off-balance sheet arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under SEC rules.

Critical accounting policies and estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which we have prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies from those described in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report.

Recent accounting pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our condensed consolidated financial statements, see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 2" appearing elsewhere in this Quarterly Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The following sections provide quantitative information on our exposure to interest rate risk. We make use of sensitivity analyses that are inherently limited in estimating actual losses in fair value that can occur from changes in market conditions.

Interest rate risk

We had cash, cash equivalents and short-term and long-term investments of ~~$111.6~~$95.6 million and $56.0 million as of ~~March 31,~~June 30, 2023 and December 31, 2022, respectively. Our cash and cash equivalents and short-term and long-term investments consist of cash, money market funds, U.S. government debt and agency securities, and certificates of deposit. The primary objectives of our investment activities are to preserve principal, maintain liquidity, and maximize income without significantly increasing risk. Our investments consist of U.S. government debt and agency securities and certificates of deposit, which may be subject to market risk due to changes in prevailing interest rates that may cause the fair values of our investments to fluctuate. We believe that a hypothetical 100 basis point increase in interest rates would not materially affect the fair value of our interest-sensitive financial instruments and any such losses would only be realized if we sold the investments prior to maturity.

Item 4. Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we carried out an evaluation, under supervision and with the participation of our management, including our Chief Executive Officer ("CEO"), who is our principal executive officer, and our Chief Financial Officer ("CFO"), who is our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, as of the end of the period covered by this report, our CEO and CFO concluded that our disclosure controls and procedures are effective at the reasonable assurance level to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during the three months ended ~~March 31,~~June 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the course of our business, we are involved in litigation or legal matters, including governmental investigations. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. We accrue liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of ~~March 31,~~June 30, 2023, we do not believe that any such matters, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations, or cash flows.

See "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 14" appearing elsewhere in this Quarterly Report for further discussion of ongoing legal matters.

Item 1A. Risk Factors

As disclosed in "Summary of Risk Factors" and "Item 1A. Risk Factors" in our Annual Report, there are a number of risks and uncertainties that may have a material effect on the operating results of our business and our financial condition. There are no additional material updates or changes to our risk factors since the filing of our Annual Report.

In evaluating our risks, readers also should carefully consider the risk factors discussed in our Annual Report, which could materially affect our business, financial condition, or operating results, in addition to the other information set forth in this report and in our other filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults on Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits


Exhibit No.						Description
10.1+						Amended and Restated Exclusive License Agreement with Alaunos Therapeutics, dated April 3, 2023.

31.1						Certification of Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of the Company, pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Harry Thomasian Jr., Chief Financial Officer (Principal Financial Officer) of the Company, pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**						Certification of Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**						Certification of Harry Thomasian Jr., Chief Financial Officer (Principal Financial Officer) of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101**						Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended ~~March 31,~~June 30, 2023, formatted in Inline XBRL (eXtensible Business Reporting Language)). Attached as Exhibit 101.0 to this Quarterly Report on Form 10-Q are the following documents formatted in XBRL: (i) the Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023 and December 31, 2022, (ii) the Condensed Consolidated Statements of Operations for the three and six months ended ~~March 31,~~June 30, 2023 and 2022, (iii) the Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended ~~March 31,~~June 30, 2023 and 2022, (iv) the Condensed Consolidated Statements of Shareholders' Equity for the three and six months ended ~~March 31,~~June 30, 2023 and 2022, (v) the Condensed Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, and (vi) the Notes to the Condensed Consolidated Financial Statements.

104**						Cover Page Interactive Data File (embedded within the Inline XBRL document).

** Furnished herewith.

+ Certain confidential portions of this exhibit were omitted by means of marking such portions with brackets [*****] because the identified confidential portions (i) are not material and (ii) is the type of information the Registrant treats as private or confidential, in accordance with Regulation S-K, Item 601(b)(10).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Precigen, Inc.

(Registrant)

Date: ~~May 10,~~August 9, 2023

By:

/s/ HARRY THOMASIAN JR.

Harry Thomasian Jr.

Chief Financial Officer

(Principal Financial and Accounting Officer)

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	March 31, 2023		December 31, 2022
Collaboration and licensing agreements	$	1,818	$	1,818
Prepaid product and service revenues	15		15
Other	—		10
Total	$	1,833	$	1,843
Current portion of deferred revenue	$	15	$	25
Long-term portion of deferred revenue	1,818		1,818
Total	$	1,833	$	1,843