PRECIGEN, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Management, with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2024. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on their evaluation of our disclosure controls and procedures as of December 31, 2024, our chief executive officer and chief financial officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Management's Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and Rule 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Table of Contents Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this item is hereby incorporated by reference to our Definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Our board of directors has adopted a Code of Business Conduct and Ethics applicable to all officers, directors, and employees, which is available on our website ( investors.precigen.com ) under "Corporate Governance." We will provide a copy of this document, without charge, upon request, by writing to us at Precigen, Inc., 20374 Seneca Meadows Parkway, Germantown, Maryland 20876, Attention: Investor Relations. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct and Ethics by posting such information on our website at the address and location specified above. Insider Trading Policies and Procedures The Company has insider trading policies and procedures that govern the purchase, sale, and other dispositions of its securities by directors, officers, and employees, and by the Company itself/and have implemented processes for the Company. We believe these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable listing standards. Item 11. Executive Compensation The information required by this item is hereby incorporated by reference to our Definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item is hereby incorporated by reference to our Definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item is hereby incorporated by reference to our Definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Item 14. Principal Accounting Fees and Services The information required by this item is hereby incorporated by reference to our Definitive Proxy Statement relating to our 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024. Table of Contents PART IV Item 15. Exhibits, Financial Statement Schedules (a) The following documents are filed as part of this Annual Report: 1. Financial Statements . Consolidated Financial Statements of Precigen, Inc. and Subsidiaries Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2024 and 2023 Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023, and 2022 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023, and 2022 Consolidated Statements of Mezzanine Equity and Shareholders' Equity for the Years Ended December 31, 2024, 2023, and 2022 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022 Notes to the Consolidated Financial Statements 2. Financial Statement Schedules . All financial statement schedules have been omitted because either the required information is not applicable or the information required is included in the consolidated financial statements and notes thereto included in this Annual Report. 3. Exhibits . The exhibits are listed in Item 15(b) below. (b) Exhibits The following exhibits are filed with this Annual Report or incorporated by reference: Exhibit No. Description 3.1* Amended and Restated Articles of Incorporation (11) 3.1A* Articles of Amendment to the Amended and Restated Articles of Incorporation (18) 3.2* Amended and Restated Bylaws (14) 4.1* Specimen certificate evidencing shares of common stock (16) 4.3 Description of Securities (12) 4.4* Form of Certificate for the 8.00% Series A Convertible Perpetual Preferred Stock (18) 10.1†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 9, 2014 (2) 10.1A†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Restricted Stock Agreement (2) 10.1B†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Incentive Stock Option Agreement (2) Table of Contents 10.1C†* Amended and Restated 2013 Omnibus Incentive Plan of the Company, Form of Nonqualified Stock Option Agreement (2) 10.1D†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 11, 2015 (3) 10.1E†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 9, 2016 (4) 10.1F†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, effective as of June 28, 2017 (5) 10.1G†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 7, 2018 (7) 10.1H†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 12, 2019 (9) 10.1I†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective January 5, 2020 (13) 10.1J†* Amendment to the Amended and Restated 2013 Omnibus Incentive Plan of the Company, as amended, effective as of June 19, 2020 (15) 10.1K†* 2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Form of Restricted Stock Unit Agreement for Officers (6) 10.1L†* 2013 Amended and Restated Omnibus Incentive Plan of the Company, as amended, Form of Restricted Stock Unit Agreement for Directors (6) 10.2* 2019 Incentive Plan of the Company for Non-Employee Service Providers, effective as of June 12, 2019 (9) 10.3†* Form of Continuing Employment Agreement (2019) (8) 10.4†* Employment Agreement, dated January 1, 2020, by and between the Company and Helen Sabzevari, Ph.D. (10) 10.5†* Executive Chairman Compensation Arrangement, by and between the Company and Randal J. Kirk (17) 10.6* Securities Issuance Agreement by and among the Company, The University of Texas System Board of Regents on behalf of The University of Texas MD Anderson Cancer Center dated as of January 13, 2015 (1) 10.7†* Precigen, Inc. 2023 Omnibus Incentive Plan (10) 10.8†* Form of Restricted Stock Unit Agreement under the 2023 Omnibus Incentive Plan (19) 10.9†** Form of Incentive Stock Option Agreement under the 2023 Omnibus Incentive Plan (19) 10.10†** Form of Continuing Employment Agreement (19) 10.11†* Form of Performance Stock Unit Agreement under the 2023 Omnibus Incentive Plan (17) 10.12* Securities Purchase Agreement, dated December 27, 2024 between Precigen Inc. and the Investors party thereto (18) 10.13* Registration Rights Agreement, dated December 30, 2024 between Precigen Inc. and the Investors party theret o (18) 10.14* Form of Common Stock Purchase Warrant (18) 10.15†† Product Commercialization Agreement with EV ER SANA Life Science Services, LLC, dated March 19 , 2025 19.1 I nsider Trading Policy 21.1 List of Subsidiaries of Precigen, Inc. 23.1 Consent of Deloitte & Touche LLP 31.1 Certification of Helen Sabzevari, Chief Executive Officer (Principal Executive Officer) of Precigen, Inc., 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 Table of Contents 31.2 Certification of Harry Thomasian Jr., Chief Financial Officer (Principal Financial Officer) of Precigen, Inc., 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 Precigen, Inc., 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 Precigen, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97** Precigen, Inc. Financial Statement Compensation Recoupment Policy 101** Interactive Data File (Precigen, Inc. and Subsidiaries Consolidated Financial Statements for the years ended December 31, 2024, 2023, and 2022, formatted in Inline XBRL (eXtensible Business Reporting Language)). Attached as Exhibit 101 are the following documents formatted in XBRL: (i) the Consolidated Balance Sheets as of December 31, 2024 and 2023, (ii) the Consolidated Statements of Operations for the years ended December 31, 2024, 2023, and 2022, (iii) the Consolidated Statements of Shareholders' and Total Equity for the years ended December 31, 2024, 2023, and 2022, (iv) the Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 and (v) the Notes to the Consolidated Financial Statements. 104** Cover Page Interactive Data File (embedded within the Inline XBRL document) * Previously filed and incorporated by reference to the exhibit indicated in the following filings by the Company: (1) Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 14, 2015. (2) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 13, 2014. (3) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 17, 2015. (4) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 13, 2016. (5) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 30, 2017. (6) Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 1, 2018. (7) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 8, 2018. (8) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 9, 2019. (9) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 9, 2019. (10) Registration Statement on Form S-8, filed with the Securities and Exchange Commission on July 6, 2023. (11) Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 4, 2020. (12) Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 2, 2020. (13) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on May 11, 2020. (14) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 4, 2020. (15) Current Report on Form 8-K, filed with the Securities and Exchange Commission on June 19, 2020. (16) Registration Statement on Form S-3, filed with the Securities and Exchange Commission on June 22, 2020. (17) Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on November 9, 2020. (18) Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 30, 2024 (19) Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 19, 2024. ** Furnished herewith Table of Contents † Indicates management contract or compensatory plan. †† Portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. (c) Financial Statement Schedules The response to Item 15(a)2 is incorporated herein by reference as applicable. Item 16. Form 10-K Summary None. Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: March 19, 2025 PRECIGEN, INC. By: /S/ HELEN SABZEVARI Helen Sabzevari Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /S/ HELEN SABZEVARI Chief Executive Officer and Director (Principal Executive Officer) 3/19/2025 Helen Sabzevari /S/ HARRY THOMASIAN JR. Chief Financial Officer (Principal Accounting and Financial Officer) 3/19/2025 Harry Thomasian Jr. /S/ RANDAL J. KIRK Executive Chairman 3/19/2025 Randal J. Kirk /S/ NANCY H. AGEE Director 3/19/2025 Nancy H. Agee /S/ CESAR L. ALVAREZ Director 3/19/2025 Cesar L. Alvarez /S/ STEVEN FRANK Director 3/19/2025 Steven Frank /S/ VINITA D. GUPTA Director 3/19/2025 Vinita D. Gupta /S/ FRED HASSAN Director 3/19/2025 Fred Hassan /S/ JEFFREY B. KINDLER Director 3/19/2025 Jeffrey B. Kindler /S/ JAMES S. TURLEY Director 3/19/2025 James S. Turley Table of Contents Index to the Financial Statements and Schedules Page(s) Consolidated Financial Statements of Precigen, Inc. and Subsidiaries F- 2 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) F- 3 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 5 Consolidated Statements of Operations for the Years Ended December 31, 2024 , 2023 , and 2022 F- 7 Consolidated Statements of Comprehensive (Loss) Income for the Years Ended December 31, 2024 , 2023 , and 2022 F- 8 Consolidated Statements of Mezzanine Equity and Shareholders' and Total Equity for the Years Ended December 31, 2024 , 2023 , and 2022 F- 9 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 , 2023 , and 2022 F- 12 Notes to the Consolidated Financial Statements F- 15 F-1 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Financial Statements December 31, 2024, 2023, and 2022 F-2 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Precigen, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Precigen, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred net losses, cash used in operations, and had an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Warrant Liability – Refer to Notes 2, 7, and 12 to the financial statements Critical Audit Matter Description The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. Liability-classified warrants are recorded at their fair value and are subject to subsequent remeasurement at each consolidated balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized in the Company’s statements of operations and comprehensive loss. The Company entered into a Securities F-3 Table of Contents Purchase Agreement with investors for the sale of its 8.00 % Series A Convertible Perpetual Preferred Stock and warrants to purchase 52,666,669 shares of its common stock, no par value per share at an exercise price of $ 0.75 per share in a private placement. The Company sold an aggregate of 79,000 shares of Preferred Stock. As the warrants do not meet all the requirements for equity classification under ASC 815, Derivatives and Hedging, they are therefore accounted for as a warrant liability at fair value on the Company’s consolidated balance sheet, with subsequent changes in fair value recognized in the consolidated statement of operations at each reporting date. The Company uses the Black-Scholes option pricing model (“Black-Scholes model”) to estimate the fair value of the warrants and the Black-Scholes model within a Monte Carlo simulation model to determine the fair value of the PIK warrants. Estimates and assumptions affecting the fair value measurement as of December 31, 2024 include the Term to PIK dividend payment rate; risk-free interest rate; the expected volatility of common stock; the fair value per share of the underlying shares of common stock; the expected term of the warrants; and a zero-dividend yield. The most significant assumption impacting the fair value of the warrants is the expected volatility of common stock, which the Company based primarily on the blended equity volatiles of the Company and guideline public companies, which were selected based on the similarity of their operations to those of the Company as well as their tenure as a public company. As of December 31, 2024, the warrant liability was $50.5 million. We identified warrants as a critical audit matter because of the significant judgments necessary in determining the consolidated balance sheet classification and the fair value of the warrant liability. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s expected volatility of common stock, including selection of the comparable public companies. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to determining the consolidated balance sheet classification and the fair value of the warrant liability included the following, among others: • We evaluated the adequacy of management’s accounting assessment and their conclusion to classify warrants as a liability considering ASC 815 and ASC 480, Distinguishing Liabilities from Equity. • With the assistance of our fair value specialists, we evaluated the reasonableness of the fair value measurement of the warrant liability, as follows: – Evaluated management’s selection of the Black-Scholes model and Monte Carlo model to determine the fair value measurements of the warrant liability. – Evaluated the incorporation of the applicable estimates and assumptions into the Black-Scholes model and risk-free interest rate as well as testing the model’s mathematical accuracy. – Tested the underlying source information used by management in making the estimates and assumptions, including the selection of the comparable public companies used in the expected volatility of the common stock. – Developed an independent estimate and compared our estimate to that used by management. • We evaluated the presentation of the warrants in the financial statements and the related fair value measurement disclosure. /s/ Deloitte & Touche LLP Baltimore, Maryland March 19, 2025 We have served as the Company’s auditor since 2019. F-4 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2024, and 2023 (Amounts in thousands, except share data) 2024 2023 Assets Current assets Cash and cash equivalents $ 29,517 $ 7,578 Short-term investments 68,393 55,277 Receivables Trade, less allowance for credit losses of $ 0 and $ 184 as of December 31, 2024 and 2023, respectively. 926 902 Other 237 673 Prepaid expenses and other 3,341 4,325 Total current assets 102,414 68,755 Property, plant and equipment, net 13,831 7,111 Intangible assets, net 4,455 40,701 Goodwill 19,139 26,612 Right-of-use assets 5,056 7,097 Other assets 371 767 Total assets $ 145,266 $ 151,043 The accompanying notes are an integral part of these consolidated financial statements. F-5 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2024 and 2023 (Amounts in thousands, except share data) 2024 2023 Liabilities, Mezzanine Equity and Shareholders' Equity Current liabilities Accounts payable $ 3,531 $ 1,726 Accrued compensation and benefits 8,417 8,250 Other accrued liabilities 4,812 6,223 Indemnification accrual 3,213 5,075 Deferred revenue 589 509 Current portion of lease liabilities 956 1,202 Total current liabilities 21,518 22,985 Deferred revenue, net of current portion 1,934 1,818 Lease liabilities, net of current portion 4,546 5,895 Deferred tax liabilities — 1,847 Warrant liabilities 50,537 — Total liabilities 78,535 32,545 Commitments and contingencies (Note 15) Mezzanine Equity Series A Preferred Stock, no par value, 81,000 shares and zero shares authorized as of December 31, 2024 and December 31, 2023, respectively; 79,000 shares and zero shares issued as of December 31, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $ 79,000 as of December 31, 2024. 28,218 — Shareholders' equity Common stock, no par value, 400,000,000 shares authorized as of December 31, 2024 and 2023; 292,869,097 shares and 256,398,527 shares issued as of December 31, 2024 and 2023, 107,130,903 shares and 248,919,096 shares outstanding as of December 31, 2024 and 2023, respectively. — — Additional paid-in capital 2,129,207 2,084,916 Accumulated deficit ( 2,090,706 ) ( 1,964,471 ) Accumulated other comprehensive income (loss) 12 ( 1,947 ) Total shareholders' equity 38,513 118,498 Total liabilities, mezzanine equity and shareholders' equity $ 145,266 $ 151,043 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Operations Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands, except share and per share data) 2024 2023 2022 Revenues Collaboration and licensing revenues, including $ 14,561 from related parties in 2022. $ — $ 75 $ 14,661 Product revenues 422 840 1,903 Service revenues 3,470 5,301 10,094 Other revenues 33 9 251 Total revenues 3,925 6,225 26,909 Operating Expenses Cost of products and services 4,267 6,119 6,339 Research and development 53,070 48,614 47,170 Selling, general and administrative 41,293 40,415 48,006 Impairment of goodwill 7,409 10,390 482 Impairment of other noncurrent assets 32,915 445 638 Total operating expenses 138,954 105,983 102,635 Operating loss ( 135,029 ) ( 99,758 ) ( 75,726 ) Other Income (Expense), Net Interest expense ( 6 ) ( 468 ) ( 6,774 ) Interest income 1,418 3,237 133 Other income, net 5,589 627 1,539 Total other income (expense), net 7,001 3,396 ( 5,102 ) Equity in net income of affiliates — — 862 Loss from continuing operations before income taxes ( 128,028 ) ( 96,362 ) ( 79,966 ) Income tax benefit 1,793 458 189 Loss from continuing operations ( 126,235 ) ( 95,904 ) ( 79,777 ) Income from discontinued operations, net of income tax benefit — — 108,094 Net (loss) income $ ( 126,235 ) $ ( 95,904 ) $ 28,317 Net (Loss) Income per Share Net loss from continuing operations per share, basic and diluted $ ( 0.47 ) $ ( 0.39 ) $ ( 0.40 ) Net income from discontinued operations per share, basic and diluted — — 0.54 Net (loss) Income per share, basic and diluted $ ( 0.47 ) $ ( 0.39 ) $ 0.14 Weighted average shares outstanding, basic and diluted 267,727,426 244,536,221 200,360,821 The accompanying notes are an integral part of these consolidated financial statements. F-7 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Comprehensive (Loss) Income Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands) 2024 2023 2022 Net (loss) income $ ( 126,235 ) $ ( 95,904 ) $ 28,317 Other comprehensive income (loss): Unrealized gain (loss) on investments 43 727 ( 431 ) Gain (loss) on foreign currency translation adjustments ( 999 ) 814 ( 3,262 ) Release of cumulative foreign currency translation adjustments to net loss from discontinued operations 2,915 — — Comprehensive (loss) income $ ( 124,276 ) $ ( 94,363 ) $ 24,624 The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Mezzanine Equity and Shareholders' Equity Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands, except share data) Mezzanine Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Shareholders' Equity Shares Amount Shares Amount 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 — — — — — — 10,207 — 10,207 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 — — — 575 — — 575 Net income — — — — — — — — 28,317 28,317 Other comprehensive loss — — — — — — — ( 3,691 ) — ( 3,691 ) Balances at December 31, 2022 — $ — 208,150,021 $ — — $ — $ 1,998,314 $ ( 3,488 ) $ ( 1,868,567 ) $ 126,259 The accompanying notes are an integral part of these consolidated financial statements. F-9 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Mezzanine Equity and Shareholders' Equity Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands, except share data) Mezzanine Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Shareholders' Equity Shares Amount Shares Amount Shares Amount Balances at December 31, 2022 — $ — 208,150,021 $ — — $ — $ 1,998,314 $ ( 3,488 ) $ ( 1,868,567 ) $ 126,259 Stock-based compensation expense — — — — — — 9,888 — — 9,888 Shares issued upon vesting of restricted stock units and for exercises of stock options — — 751,233 — — — — — — — Shares issued for accrued compensation — — 3,068,825 — — — 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 Shares returned pursuant to share lending agreement — — ( 7,479,431 ) — 7,479,431 — — — — — Net loss — — — — — — — — ( 95,904 ) ( 95,904 ) Other comprehensive income — — — — — — — 1,541 — 1,541 Balances at December 31, 2023 — $ — 248,919,096 $ — 7,479,431 $ — $ 2,084,916 $ ( 1,947 ) $ ( 1,964,471 ) $ 118,498 The accompanying notes are an integral part of these consolidated financial statements. F-10 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Mezzanine Equity and Shareholders' Equity Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands, except share data) Mezzanine Stock Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Accumulated Deficit Total Shareholders' Equity Shares Amount Shares Amount Shares Amount Balances at December 31, 2023 — $ — 248,919,096 $ — 7,479,431 $ — $ 2,084,916 $ ( 1,947 ) $ ( 1,964,471 ) $ 118,498 Stock-based compensation expense — — — — — — 9,471 — — 9,471 Shares issued upon vesting of restricted stock units and for exercises of stock options — — 1,514,394 — ( 1,514,394 ) — 346 — — 346 Shares issued for accrued compensation — — 2,170,885 — ( 2,170,885 ) — 3,039 — — 3,039 Shares issued as payment for services — — 385,783 — ( 385,783 ) — 553 — — 553 Shares issued in public offering, net of issuance costs — — 39,878,939 — ( 3,408,369 ) — 30,882 — — 30,882 Net loss — — — — — — — — ( 126,235 ) ( 126,235 ) Issuance of Series A Preferred Stock 79,000 28,218 — — — — — — — — Reclassification of cumulative foreign currency translation adjustments to other income (expense), net — — — — — — — 2,915 — 2,915 Other comprehensive loss — — — — — — — ( 956 ) — ( 956 ) Balances at December 31, 2024 79,000 $ 28,218 292,869,097 $ — — $ — $ 2,129,207 $ 12 $ ( 2,090,706 ) $ 38,513 The accompanying notes are an integral part of these consolidated financial statements. F-11 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands) 2024 2023 2022 Cash flows from operating activities Net (loss) income $ ( 126,235 ) $ ( 95,904 ) $ 28,317 Adjustments to reconcile net (loss) income to net cash used in operating activities: Depreciation and amortization 4,526 6,668 10,765 (Loss) Gain on disposals of assets, net ( 2 ) ( 72 ) 421 Impairment of goodwill 7,409 10,390 482 Impairment of other noncurrent assets 32,915 445 638 Gain on sale of discontinued operations — — ( 94,702 ) Gain on debt retirement — ( 60 ) ( 961 ) Loss on reclassification of cumulative foreign currency translation adjustments 2,915 — — Amortization of premiums (discounts) on investments, net ( 883 ) ( 1,809 ) 832 Equity in net income of affiliates — — ( 862 ) Stock-based compensation expense 9,471 9,888 10,206 Shares issued as payment for services 553 545 575 Provision for credit losses — — 944 Accretion of debt discount and amortization of deferred financing costs — 60 1,042 Deferred income taxes ( 1,795 ) ( 479 ) ( 150 ) Issuance cost related to Warrants 292 — — Other noncash items — 2 107 Changes in operating assets and liabilities: Receivables: Trade ( 24 ) 76 ( 2,175 ) Other 438 12,153 ( 11,338 ) Prepaid expenses and other 981 748 2,630 Other assets 120 129 ( 101 ) Accounts payable 1,549 ( 2,421 ) 379 Accrued compensation and benefits 3,145 5,227 ( 37 ) Other accrued liabilities ( 1,827 ) 782 ( 1,517 ) Deferred revenue 196 484 ( 23,396 ) Lease liabilities ( 55 ) ( 107 ) ( 107 ) Other long-term liabilities — — ( 37 ) Indemnification Accruals ( 1,862 ) ( 13,675 ) 13,000 Net cash used in operating activities ( 68,173 ) ( 66,930 ) ( 65,045 ) The accompanying notes are an integral part of these consolidated financial statements. F-12 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands) 2024 2023 2022 Cash flows from investing activities Purchases of investments ( 187,206 ) ( 185,026 ) — Sales and maturities of investments 175,016 183,377 68,441 Purchases of property, plant and equipment ( 8,584 ) ( 1,536 ) ( 4,924 ) Proceeds from sale of assets 60 98 594 Proceeds from sale of discontinued operations — — 162,306 Net cash (used in) provided by investing activities ( 20,714 ) ( 3,087 ) 226,417 Cash flows from financing activities Proceeds from issuance of common stock , net of issuance costs 31,237 72,808 — Payments of long-term debt, including cost to retire of $ 120 and $ 588 in 2023 and 2022, respectively — ( 43,219 ) ( 155,293 ) Proceeds from issuance of Series A Preferred Stock and Warrants 79,000 — — Proceeds from stock option exercises 346 — 1 Net cash provided by (used in) financing activities 110,583 29,589 ( 155,292 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 27 ) ( 320 ) ( 827 ) Net increase (decrease) in cash, cash equivalents, and restricted cash 21,669 ( 40,748 ) 5,253 Cash, cash equivalents, and restricted cash Beginning of year 7,848 48,596 43,343 End of year $ 29,517 $ 7,848 $ 48,596 The accompanying notes are an integral part of these consolidated financial statements. F-13 Table of Contents Precigen, Inc. and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2024, 2023, and 2022 (Amounts in thousands) 2024 2023 2022 Supplemental disclosure of cash flow information Cash paid during the period for interest $ 7 $ 1,171 $ 8,535 Cash paid during the period for income taxes 4 21 — Significant noncash activities Accrued compensation paid in equity awards 3,039 3,361 1,698 Purchases of property and equipment included in accounts payable and other accrued liabilities 341 566 40 Issuance costs included in accounts payable and other accrued liabilities 892 — — The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of December 31, 2024 and 2023 as shown above: 2024 2023 Cash and cash equivalents $ 29,517 $ 7,578 Restricted cash included in other assets — 270 Cash, cash equivalents, and restricted cash $ 29,517 $ 7,848 The accompanying notes are an integral part of these consolidated financial statements. F-14 Table of Contents Precigen, Inc. and Subsidiaries Notes to the Consolidated Financial Statements (Amounts in thousands, except share and per share data) 1. Organization and Basis of Presentation 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’s primary operations are located in the State of Maryland. Precigen’s leading product candidate is PRGN-2012, an AdenoVerse® gene therapy. Zopapogene imadenovec is the nonproprietary name for the investigational therapeutic known as PRGN-2012. Zopapogene imadenovec has not been approved by any health authority in any country for any indication. The United States Food and Drug Administration ("FDA") granted priority review to PRGN-2012 Biologics License Application ("BLA") with a Prescription Drug User Fee Act ("PDUFA") target action date set for August 27, 2025. This therapy is intended for the treatment of adults with recurrent respiratory papillomatosis ("RRP"). Precigen also has one wholly owned operating subsidiary, consisting of Exemplar Genetics, LLC, doing business as Precigen Exemplar ("Exemplar"). Precigen's other historical operating subsidiary, Precigen ActoBio, Inc. ("ActoBio") ceased operations during 2024. Actobio utilized a proprietary class of microbe-based biopharmaceuticals that enable expression and local delivery of disease-modifying therapeutics, with its primary operations were located in Ghent, Belgium. As part of a continuing effort to strategically prioritize the application of resources to particular development efforts, in 2024, the Company initiated a shutdown of ActoBio's operations. This included terminating leases and employees, and the disposition of certain of its assets and obligations with a focus on the preservation of ActoBio's intellectual property. See Notes 8 and 9 for further discussion related to non-cash impairment charges recorded during 2024, and Note 12 for discussion of cumulative translation losses reclassified into operations in the year ended 2024 in relation to these activities. During the year ended 2024, the Company also recorded a charge related to employee severance and termination benefits related to ActoBio employees of $ 2,100 , fully paid during 2024, of which $ 1,700 is included in research and development expenses and $ 400 is included in selling, general and administrative expenses included in the accompanying consolidated statement of operations for the year ended December 31, 2024. In addition to the actions taken at ActoBio noted above, in August 2024 the Company also began undertaking a strategic prioritization of its clinical portfolio and streamlining of its resources, including a reduction of over 20 % of its workforce, to focus on the potential commercialization of the PRGN-2012. These strategic changes are designed to reduce required resources for non-priority programs and enable the Company to focus on pre-commercialization efforts regarding PRGN-2012, including supporting the submission of a rolling biologics license application ("BLA") under an accelerated approval pathway which was filed in the fourth quarter of 2024, conducting a confirmatory clinical trial, and manufacturing commercial product. Additionally, the Company continues the acceleration of commercial readiness efforts for a potential launch in 2025. As a result of the actions taken related to this reduction in its workforce, the Company recorded a charge related to employee severance and termination benefits of $ 1,639 , of which $ 594 is included in research and development expenses and $ 1,045 is included in selling, general and administrative expenses included in the accompanying consolidated statement of operations for the year ended December 31, 2024. As of December 31, 2024, $ 853 of the $ 1,639 charge was paid, leaving a liability of $ 786 , which is included in accrued compensation and benefits on the consolidated balance sheets. Exemplar is committed to enabling the study of life-threatening human diseases through the development of MiniSwine Yucatan miniature pig research models and services. Exemplar’s primary operations are located in the State of Iowa. Precigen and its consolidated subsidiaries are hereinafter collectively referred to as the "Company." Discontinued Operations On August 18, 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. Trans Ova has been presented as discontinued operations for all periods through its sale in August of 2022. See Note 3 for further discussion. Trans Ova was formerly a separate reportable segment. F-15 Table of Contents Liquidity and Going Concern During the twelve months ended December 31, 2024, the Company incurred a net loss of $ 126,235 and used $ 68,173 of cash in its operations, and as of December 31, 2024, had an accumulated deficit of $ 2,090,706 . The Company has incurred operating losses since its inception and management expects operating losses and negative cash flows from operations, exclusive of cash sources outside of the Company’s direct control, including potential revenue from PRGN-2012 for the treatment of adults with RRP, to continue in the foreseeable future. In addition, as of December 31, 2024, the Company had $ 97,910 in cash, cash equivalents and short-term investments, and had no committed source of additional funding. Considering only the forecasted cash flows under its direct control, the Company’s current cash and investments position is not sufficient to fund the Company's planned operations for one year after the date the consolidated financial statements are issued and accordingly, these conditions and events raise substantial doubt about the Company's ability to continue as a going concern. As the Company continues to incur losses, its transition to profitability will depend on the successful development, approval and commercialization of product candidates and on the achievement of sufficient revenues to support the Company's cost structure. The analysis used to determine the Company's ability to continue as a going concern does not include cash sources outside of the Company's direct control that management expects to be available within the next twelve months, such as the potential revenue from PRGN-2012 for the treatment of adults with RRP. This potential revenue has been excluded as the BLA, which the FDA accepted and granted priority review in February 2025 (with a PDUFA target action date set for August 27, 2025), has not yet been approved. In addition, the Company may decide, or be required, to raise additional capital. This additional capital could be raised through a combination of non-dilutive financings (including debt financings, collaborations, strategic alliances, monetization of non-core assets, marketing, distribution or licensing arrangements, and/or dilutive financings including equity and/or debt financings which may include an equity component). Also, any collaborations, strategic alliances, monetization of non-core assets or marketing, distribution or licensing arrangement may require the Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full potential value of such rights. If the approval of the PRGN-2012 BLA is delayed or is not approved, and/or the Company is unable to obtain additional capital, the Company will assess its capital resources and may be required to delay, reduce the scope of, or eliminate some or all of its operations, which may include research and development and clinical trials. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements reflect the operations of Precigen and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated. 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 products and companies, and the technical risks associated with the successful research, development and clinical manufacturing of its therapeutic product candidates. Revenue Recognition The Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the promises and distinct performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligations. F-16 Table of Contents Collaboration and licensing revenues The Company has historically generated collaboration and licensing revenues through agreements with collaborators (known as exclusive channel collaborations or "ECCs") and licensing agreements whereby the collaborators or the licensee obtained exclusive access to the Company's proprietary technologies for use in the research, development and commercialization of products and/or treatments in a contractually specified field of use. Generally, the terms of these agreements provided that the Company received some or all of the following: (i) upfront payments upon consummation of the agreement; (ii) reimbursements for costs incurred by the Company for research and development and/or manufacturing efforts related to specific applications provided for in the agreement; (iii) milestone payments upon the achievement of specified development, regulatory, and commercial activities; and (iv) royalties on sales of products arising from the collaboration or licensing agreement. The agreement typically continued in perpetuity unless terminated and each of the Company's collaborators retain a right to terminate the agreement upon providing the Company written notice a certain period of time prior to such termination, generally 90 days. The Company's collaboration and licensing agreements typically contain multiple promises, including technology licenses, research and development services and, in certain cases, manufacturing services. The Company determined whether each of the promises is a distinct performance obligation. As the nature of the promises in the Company's collaboration and licensing agreements were highly integrated and interrelated, the Company typically combined most of its promises into a single performance obligation. Because the Company was performing research and development services during early-stage development, the services were integral to the utilization of the technology license. Therefore, the Company determined that the technology license and research and development services were typically inseparable from each other during the performance period of its collaboration and licensing agreements. Options to acquire additional services were considered to determine if they constituted material rights. Contingent manufacturing services that may be provided under certain of the Company's agreements were considered to be a separate future contract and not part of the collaboration or licensing agreement. At contract inception, the Company determined the transaction price, including fixed consideration and any estimated amounts of variable consideration. The transaction price was allocated to the performance obligations in the agreement based on the standalone selling price of each performance obligation. The Company utilized judgment to determine the most appropriate method to measure its progress of performance under the agreement, primarily based on inputs necessary to fulfill the performance obligation. From time to time, the Company and certain collaborators may cancel their agreements, relieving the Company of any further performance obligations under the agreement. Upon such cancellation or when the Company has determined no further performance obligations are required of the Company under an agreement, the Company recognizes any remaining deferred revenue as revenue. Product and service revenues The Company's product and service revenues are generated through Exemplar which generates product and service revenues through the development and sale of genetically engineered miniature swine models. The Company evaluates each promised product or service under its contracts and identifies performance obligations for each distinct product or service. The Company then allocates the transaction price of the contract to each performance obligation, recognizing the transaction price as revenue at a point in time when control of the promised product or over time when the promised service is rendered. The Company typically recognizes revenue using an output-based measure, generally time elapsed or days of service, to measure progress and transfer of the control of the performance obligation to the customer. Payment terms are typically due within 30 days of invoicing, which occurs prior to or when revenue is recognized. 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 or reacquire 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 December 31, 2024 and 2023, the Company had research and development commitments with third parties that had not yet F-17 Table of Contents been incurred totaling $ 5,885 and $ 17,800 , 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. Short-term Investments As of December 31, 2024 and 2023 short-term investments include corporate bonds, United States government debt 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: 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. Pre-Launch Inventory Prior to an initial regulatory authorization for our drug product candidates, we expense costs relating to raw materials and inventory production as research and development expenses in our consolidated statements of operations in the period incurred. We capitalize the costs of production as inventory when we believe regulatory authorization and subsequent commercialization is considered probable and we expect to realize future economic benefit from the sales of the drug product candidate. We have not capitalized any inventory to date in our Biopharmaceuticals reporting segment. Concentrations of Risk Due to the Company's fixed rate securities holdings, the Company's investment portfolio is susceptible to changes in interest rates. As of December 31, 2024, gross unrealized losses on the Company's short-term investments were not material. From time to time, the Company may liquidate some or all of its investments to fund operational needs or other activities, such as capital expenditures or business acquisitions. Although the Company has no intent to liquidate such investments, depending on which investments the Company liquidates to fund these activities, the Company could recognize a portion, or all, of the gross unrealized losses. Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade and other receivables. The Company manages credit risk through credit approvals, credit limits, and monitoring procedures. The Company performs ongoing credit evaluations of its customers but generally does not require collateral to support accounts receivable. F-18 Table of Contents Equity Method Investments The Company has accounted for its investment in its joint ventures ("JVs") using the equity method of accounting based upon relative ownership interest. At December 31, 2024 and 2023, the Company does not hold any material investments in JVs. Variable Interest Entities The Company identifies entities that (i) do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support or (ii) in which the equity investors lack an essential characteristic of a controlling financial interest as variable interest entities ("VIEs"). The Company performs an initial and on-going evaluation of the entities with which the Company has variable interests to determine if any of these entities are VIEs. If an entity is identified as a VIE, the Company performs an assessment to determine whether the Company has both (i) the power to direct activities that most significantly impact the VIE's economic performance and (ii) have the obligation to absorb losses from or the right to receive benefits of the VIE that could potentially be significant to the VIE. If both of these criteria are satisfied, the Company is identified as the primary beneficiary of the VIE. As of December 31, 2024 and 2023 , the Company determined that certain of its collaborators and JVs were VIEs. The Company was not the primary beneficiary for these entities since it did not have the power to direct the activities that most significantly impact on the economic pe rformance of the VIEs. As of December 31, 2024 and 2023, the Company had no risk of loss related to the identified VIEs. Accounts Receivable The Company's expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions, and a review of the current status of accounts receivables. Balances are written off at the point when collection attempts have been exhausted. Estimates are used to determine the loss allowance, which is based on assessment of anticipated payment and other historical, current, and future information that is reasonably available. The following table shows the activity in the allowance for credit losses for the years ended December 31, 2024, 2023, and 2022: 2024 2023 2022 Beginning balance $ 184 $ 184 $ 1,693 Charged to operating expenses — — — Write offs of accounts receivable, net of recoveries ( 184 ) — ( 1,509 ) Ending balance $ — $ 184 $ 184 Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Major additions or betterments are capitalized, and repairs and maintenance are expensed as incurred. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of these assets from continuing operations are as follows: Years Land improvements 9 – 15 Buildings and building improvements 9 – 15 Furniture and fixtures 2 – 7 Equipment 3 – 7 Breeding stock 2 Computer hardware and software 1 – 5 Leasehold improvements are amortized over the shorter of the useful life of the asset or the applicable lease term, generally one to eleven years . F-19 Table of Contents Operating Leases The Company determines if an arrangement is a lease at inception. Operating leases are included as right-of-use assets ("ROU Assets") and lease liabilities on the consolidated balance sheets. The Company has elected not to recognize ROU Assets or lease liabilities for leases with lease terms of one year or less. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The initial measurement of the ROU Asset also includes any lease payments made, adjusted for lease incentives. For leases that contain fixed non-lease payments, the Company accounts for the lease and non-lease components as a single lease component. Variable lease payments, which primarily include payments for non-lease components such as maintenance costs, are excluded from the ROU Assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company's operating leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate at the lease commencement date, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease, in determining the present value of future payments. The lease term for all of the Company's leases includes the noncancelable period of the lease plus any additional periods covered by options that the Company is reasonably certain to exercise, either to extend or to not terminate the lease. Lease expense is recognized on a straight-line basis over the lease term. Goodwill Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is reviewed for impairment at least annually. The Company may elect to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount prior to performing the goodwill impairment test. If this is the case, the quantitative goodwill impairment test is required. If it is more-likely-than-not that the fair value of a reporting unit is greater than the carrying amount, the quantitative goodwill impairment test is not required. When a quantitative goodwill impairment test is performed, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, the entity must record the impairment charge for the excess carrying amount, which is limited to the amount of goodwill allocated to the reporting unit. If the fair value of the reporting unit exceeds its carrying amount, no goodwill impairment charge is necessary. The Company performs its annual impairment review of goodwill on December 31 and performs incremental impairment reviews if a triggering event occurs prior to the annual impairment review. When the Company performs quantitative evaluations, the fair value of the reporting units is primarily determined based on the income approach. The income approach is a valuation technique in which fair value is based on forecasted future cash flows, discounted at the appropriate rate of return commensurate with the risk as well as current rates of return for equity and debt capital as of the valuation date. The forecast used in the Company's estimation of fair value was developed by management based on historical operating results, incorporating adjustments to reflect management's planned changes in operations and market considerations. The discount rate utilizes a risk adjusted weighted average cost of capital. See Note 9 for additional discussion regarding goodwill impairment charges recorded in the years ended December 31, 2024, and 2023. Intangible Assets Intangible assets subject to amortization consist of patents, developed technologies and know-how; customer relationships; and trademarks acquired as a result of mergers and acquisitions. These intangible assets are subject to amortization, were recorded at fair value at the date of acquisition, and are stated net of accumulated amortization. The Company amortizes long-lived intangible assets to reflect the pattern in which the economic benefits of the intangible asset are expected to be realized. The intangible assets are amortized over their estimated useful lives, ranging from seven to thirteen years with an average of ten years for the patents, developed technologies, and know-how; customer relationships; and trademarks. F-20 Table of Contents Impairment of Long-Lived Assets Long-lived assets to be held and used, including property, plant and equipment, ROU Assets, and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. See Notes 8 and 9 for additional discussion of impairment of long-lived assets for the years ended December 31, 2024, 2023, and 2022. Foreign Currency Translation The assets and liabilities of foreign subsidiaries, where the local currency is the functional currency, are translated from their respective functional currencies into United States dollars at the exchange rates in effect at the balance sheet date, with resulting foreign currency translation adjustments recorded in the Consolidated Statement of Operations after the closure of ActoBio in 2024. Prior to that, foreign currency translations adjustments were recorded in the consolidate statements of comprehensive (loss) income. Revenue and expense amounts are translated at average rates during the period. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to both differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of the change. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company identifies any uncertain income tax positions and recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest, if any, related to unrecognized tax benefits as a component of interest expense. Penalties, if any, are recorded in selling, general and administrative expenses. Share-Based Payments Precigen uses the Black-Scholes option pricing model to estimate the grant-date fair value of all stock options. The Black-Scholes option pricing model requires the use of assumptions for estimated expected volatility, estimated expected term of stock options, risk-free rate, estimated expected dividend yield, and the fair value of the underlying common stock at the date of grant. Through 2019, since Precigen did not have sufficient history to estimate the expected volatility of its common stock price, expected volatility was based on a blended approach that utilized the volatility of Precigen's common stock and the volatility of peer public entities that were similar in size and industry. Beginning in 2020, for stock options with an expected term where there is sufficient history available, expected volatility is based on the volatility of Precigen's common stock. For any stock options where sufficient history is not available for the expected term, expected volatility is based on the blended approach discussed above. Precigen estimates the expected term of options based on previous history of exercises unless certain terms of the stock option require a different expected term that more appropriately reflects the estimated life of the stock option. The risk-free rate is based on the United States Treasury yield curve in effect at the time of grant for the expected term of the option. The expected dividend yield is 0 % as Precigen does not expect to declare cash dividends in the near future. The fair value of the underlying common stock is determined based on the quoted market price on the Nasdaq Global Select Market ("Nasdaq"). Forfeitures are recorded when incurred. The assumptions used in the Black-Scholes option pricing model for the years ended December 31, 2024, 2023, and 2022 are set forth in the table below: F-21 Table of Contents 2024 2023 2022 Valuation assumptions Expected dividend yield 0 % 0 % 0 % Expected volatility 85 %– 95 % 85 %– 95 % 87 %– 89 % Expected term (years) 6.00 - 10.00 6.00 - 10.00 6.25 Risk-free interest rate 3.55 %– 4.56 % 3.52 %– 4.80 % 1.64 %– 4.12 % Grant date fair value for the Company's restricted stock units ("RSUs") and performance based restricted stocks units ("PSUs") are based on the fair value of the underlying common stock as determined based on the quoted market price on the Nasdaq on the date of grant. Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common shareholders by the weighted average shares outstanding during the period, without consideration of common stock equivalents. Diluted net income (loss) per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, using the treasury-stock method. For purposes of the diluted net income (loss) per share calculation, shares to be issued pursuant to stock options, RSUs, PSUs, and the Warrants are considered to be common stock equivalents but are excluded from the calculation of diluted net income (loss) per share because their effect would be anti-dilutive as described in the next paragraph, therefore, basic and diluted net income (loss) per share were the same for all periods presented. See Note 12 for further discussion of the Company's Share Lending Agreement, which was terminated in October 2023. In accordance with ASC 260, the control number for determining whether including potential common shares in the diluted earnings per share, or EPS, computation would be antidilutive should be income 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 adjusting for a discontinued operation. The following potentially dilutive securities as of December 31, 2024, 2023, and 2022, have been excluded from the computations of diluted weighted average shares outstanding for the years then ended as they would have been anti-dilutive: December 31, 2024 2023 2022 Options 25,924,734 22,057,340 15,201,276 Restricted stock units 826,057 961,534 697,815 Performance stock units 3,178,000 — — Total 29,928,791 23,018,874 15,899,091 F-22 Table of Contents In addition, the Company's Convertible Notes, prior to their retirement in the second quarter of 2023, were convertible into common stock at an exercise price of approximately $ 17.05 per share of common stock, representing approximately 2,542,420 shares at December 31, 2022. The shares underlying the Convertibles Notes were considered for the dilutive calculation but were excluded in all years presented as their effect is antidilutive. See Note 10 for further discussion of the Convertible Notes. The table above does not include approximately 70,222,215 shares of common stock initially underlying the Series A Preferred Stock and 52,666,669 shares of common stock, initially underlying the Warrants, as exercisability of the Series A Preferred Stock and the Warrants is contingent upon the Company increasing the number of authorized shares of common stock, which was not obtained as of December 31, 2024. Gain on transfers of nonfinancial assets The Company accounts for dispositions of intellectual and property rights, which are considered nonfinancial assets, in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) and recognizes a gain or loss on sale upon transferring control of the nonfinancial asset to the purchaser, which is generally satisfied at the time of sale. The Company has concluded that the assets are not an output of the entity's ordinary activities, so the transaction is not within the scope of ASC 606. In connection with the sale in December 2024 of intellectual property rights and royalty rights related to FCX-007, a clinical stage product candidate being developed by Castle Creek Biosciences, LLC, the Company recognized a gain of $ 8,500 recorded in the Consolidated Statement of Operations within Other Income (Expense), net, for the year ended December 31, 2024. 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 also determined to be reportable segments. 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. F-23 Table of Contents Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For equity-classified warrants, the fair value is not remeasured. Mezzanine Equity Where ordinary or preferred shares are determined to be conditionally redeemable upon the occurrence of certain events that are not solely within the control of the Company, and upon such event, the shares would become redeemable at the option of the holder, or when the Company currently does not have a sufficient number of authorized and unissued shares available to share settle the instrument, they are classified as 'mezzanine equity' (temporary equity). The purpose of this classification is to convey that such a security may not be permanently part of equity and could result in a demand for cash, securities or other assets of the entity in the future. The Company evaluates whether the contingent redemption provisions are probable of becoming redeemable to determine whether the carrying value of the redeemable convertible preferred units are required to be remeasured to their respective redemption values. All instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g. more equity-like or debt-like). Features identified as freestanding instruments or bifurcated embedded derivatives that are material are recognized separately as a derivative asset or liability in the consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures. According to ASU 2023-07, public entities are required to disclose its significant segment expense categories and amounts for each reportable segment. A significant segment expense is an expense that is significant to the segment, regularly provided to or easily computed from information regularly provided to the chief operating decision maker and included in the reported measure of segment profit or loss. In the fiscal year ended December 31, 2024, the Company adopted ASU 2023-07, which was applied retrospectively to all prior periods presented. This adoption resulted in the disclosure of significant expense categories and amounts for each reportable segment, which are regularly provided to the CODM and included in the reported Segment Adjusted EBITDA. Previous Segment Adjusted EBITDA disclosures have been adjusted for comparability. See Note 16 for further discussion on Segment Adjusted EBITDA. Recently Issued Accounting Pronouncements Not Yet Adopted In August 2023, the FASB issued Accounting Standards Update No. 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement (“ASU 2023-05”). ASU 2023-05 clarifies existing guidance to reduce diversity in practice and is requiring a joint venture to recognize and initially measure its assets and liabilities using a new basis of accounting, at fair value, upon formation. These amendments are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. We do not believe the adoption of ASU 2023-05 will have a material impact on our consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, in order to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in ASU 2024-03 require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses in interim and year-end reporting periods. The amendments in this ASU apply to F-24 Table of Contents all public business entities and are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. In November 2024, the FASB issued ASU 2024-04 to improve the relevance and consistency in the application of induced conversion guidance in Subtopic 470-20, Debt— Debt with Conversion and Other Options. T he amendments in this Update affect entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion. The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. There are no other new 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 Trans Ova As part of the Company's strategic shift to becoming a primarily healthcare company, as discussed in Note 1, on 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, $ 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. In April 2024, the Buyer notified the Company that Trans Ova did not meet the financial measures required in 2023 in order to require the second $ 5,000 earn-out payment. The Company has disputed certain items reflected in the 2023 financial measures presented by the Buyer in the aforementioned notification. 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 addition, no amounts have been recorded as a gain contingency subsequent to the sale of Trans Ova. In connection with the Transaction, 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 was recorded as a reduction of the gain on divestiture in the third quarter of 2022. As of December 31, 2024, and 2023, $ 3,213 and $ 5,075 were included in indemnification accrual on the consolidated balance sheets, respectively. During 2024, the Company paid $ 1,862 for expenses incurred by the Buyer for the period from July 2023 to December 2023. In addition, during 2023, the Company paid $ 675 for indemnification claims against this liability for the period from the date of sale to June 2023. The following table presents the financial results of discontinued operations related to TransOva through the date of disposition in 2022: F-25 Table of Contents Year Ended December 31, 2022 Product revenues $ 21,494 Service revenues 49,657 Total revenues 71,151 Cost of products 18,634 Cost of services 22,701 Research and development 2,348 Selling, general and administrative 15,215 Total operating expenses 58,898 Operating income 12,253 Other income, net 1,139 Gain on divestiture 94,702 Income before income taxes 108,094 Income tax (expense) benefit — Income from discontinued operations $ 108,094 The following table presents the significant noncash items, purchases of property, plant and equipment, and proceeds from sales of assets for the discontinued operations related to Trans Ova that are included in the accompanying consolidated statements of cash flows for the year ended December 31, 2022: Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization $ 3,574 Loss on disposal of assets 421 Provision for credit losses 944 Stock-based compensation expense 9 Cash flows from investing activities Purchases of property, plant and equipment ( 3,529 ) Proceeds from sales of assets 594 4. Investments in Joint Ventures Intrexon Energy Partners In 2014, the Company and certain investors (the "IEP Investors"), including an affiliate of Third Security, entered into a Limited Liability Company Agreement that governs the affairs and conduct of business of Intrexon Energy Partners, a JV formed to optimize and scale-up the Company's MBP technology for the production of certain fuels and lubricants. The Company also entered into an ECC with Intrexon Energy Partners providing exclusive rights to the Company's technology for the use in bioconversion for the production of certain fuels and lubricants, as a result of which the Company received a technology access fee of $ 25,000 while retaining a 50 % membership interest in Intrexon Energy Partners at that time. Intrexon Energy Partners was governed by the Intrexon Energy Partners' board of managers, which had five members. Prior to Precigen’s purchase of certain membership interests from the IEP Investors in the third quarter of 2022 as discussed below, two members of the Intrexon Energy Partners Board were designated by the Company and three members were designated by a majority of the IEP Investors. Upon accumulating 87.5 % of the membership interests owned by the IEP Investors in the third quarter of 2022, the Company obtained the right to designate all members of the Intrexon Energy Partners Board. See Note 5 for additional discussion regarding the Company's investment in Intrexon Energy Partners. F-26 Table of Contents Intrexon Energy Partners II In 2015, the Company and certain investors (the "IEPII Investors"), entered into a Limited Liability Company Agreement that governs the affairs and conduct of business of Intrexon Energy Partners II, a JV formed to utilize the Company's MBP technology for the production of 1,4-butanediol, an industrial chemical used to manufacture spandex, polyurethane, plastics, and polyester. The Company also entered into an ECC with Intrexon Energy Partners II that provided exclusive rights to the Company's technology for use in the field, as a result of which the Company received a technology access fee of $ 18,000 while retaining a 50 % membership interest in Intrexon Energy Partners II. Intrexon Energy Partners II was governed by the Intrexon Energy Partners II's board of managers, which had five members. Prior to Precigen’s purchase of the membership interests from the IEPII Investors in the third quarter of 2022, one member of the Intrexon Energy Partners II Board was designated by the Company and four members were designated by a majority of the IEPII Investors. Upon acquisition of 97.1 % of the membership interests owned by the IEPII Investors in the third quarter of 2022 (the Company purchased the remaining 2.9 % membership units in the fourth quarter of 2022), the Company obtained the right to designate all members of the Intrexon Energy Partners II Board. See Note 5 for additional discussion regarding the Company's investment in Intrexon Energy Partners II. Acquisition of Membership Interests in Intrexon Energy Partners and Intrexon Energy Partners II On December 29, 2021, the Company received a letter from a group of investors in each of Intrexon Energy Partners and Intrexon Energy Partners II, referring certain issues to arbitration pursuant to the arbitration provisions of the Amended and Restated Limited Liability Company Agreements of Intrexon Energy Partners and Intrexon Energy Partners II (the “Arbitration Matters”). In July 2022, the arbitration panel ruled on the Arbitration Matters, and adopted the Company’s proposed terms with respect to each of the Arbitration Matters and, pursuant to that ruling, the Company acquired the membership interests of the investors for an aggregate amount of approximately $ 7,000 in cash. The Company recorded the $ 7,000 payment as a reduction of the revenue in 2022 (from deferred revenue – see Note 5) upon the Company obtaining control of Intrexon Energy Partners and Intrexon Energy Partners II. The fair value of the net assets of Intrexon Energy Partners and Intrexon Energy Partners II at the acquisition date was deemed to be substantially $ 0 . The Company liquidated and dissolved Intrexon Energy Partners and Intrexon Energy Partners II during the fourth quarter of 2022, which did not have a material impact on the financial statements of the Company. 5. 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. F-27 Table of Contents The following table summarizes the amounts recorded as revenue in the consolidated statements of operations for each significant counterparty to a collaboration or licensing agreement for the years ended December 31, 2023 and 2022. There was no such revenue in the year ended December 31, 2024. Year Ended December 31, 2023 2022 Intrexon Energy Partners, LLC — 3,768 Intrexon Energy Partners II, LLC — 10,793 Other 75 100 Total (1) $ 75 $ 14,661 (1) Collaboration and licensing revenue recognized for the year ended December 31, 2022, includes the recognition of $ 14,561 , associated with upfront and milestone payments which were previously deferred. The following is a summary of the terms of the Company's significant collaborations and licensing agreements from continuing operations. Intrexon Energy Partners and Intrexon Energy Partners II Collaborations As discussed in Note 4 in July 2022, the Company obtained control of both of Intrexon Energy Partners' board of managers and Intrexon Energy Partners II's board of managers. Based on its assessment of the status of each collaboration and ultimate dissolution of Intrexon Energy Partners and Intrexon Energy Partners II, the Company determined that it was probable that no further performance obligations would occur under the respective collaboration agreements. Accordingly, the Company recognized the remaining balance of deferred revenue associated with Intrexon Energy Partners and Intrexon Energy Partners II, less the amounts paid to acquire the membership interests of the investors of $ 7,000 , for an aggregate amount of revenue recognized of approximately $ 14,561 . 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 an Exclusive License Agreement by and between the Company and Alaunos, dated October 5, 2018. On October 4, 2024, the License Agreement was terminated. Following the termination of the License Agreement, Precigen has regained all rights previously licensed to Alaunos and Alaunos retains no rights to utilize any of Precigen’s technology. Deferred Revenue Deferred revenue primarily consists of consideration received for the Company's collaboration and licensing agreements. 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 revenue consisted of the following: December 31, 2024 2023 Collaboration and licensing agreements $ 1,818 $ 1,818 Prepaid product and service revenues 15 15 Other 690 494 Total $ 2,523 $ 2,327 Current portion of deferred revenue $ 589 $ 509 Long-term portion of deferred revenue 1,934 1,818 Total $ 2,523 $ 2,327 F-28 Table of Contents 6. Short-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 December 31, 2024: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value United States government debt securities $ 67,464 $ 15 $ ( 5 ) $ 67,474 Certificates of deposit 848 3 — 851 Corporate Bonds 69 — ( 1 ) 68 Total $ 68,381 $ 18 $ ( 6 ) $ 68,393 The following table summarizes the amortized cost, gross unrealized gains and losses, and fair value of available-for-sale investments as of December 31, 2023: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Aggregate Fair Value United States government debt securities $ 51,704 $ 102 $ ( 135 ) $ 51,671 Certificates of deposit 3,361 1 ( 1 ) 3,361 Corporate Bonds 245 — — $ 245 Total $ 55,310 $ 103 $ ( 136 ) $ 55,277 In addition, at December 31, 2024 and December 31, 2023, the Company held U.S. government debt securities valued at $ 24,169 and $ 1,502 , respectively, which was included in cash and cash equivalents in the consolidated balance sheets as these investments had an original maturity of less than three months when purchased. See Notes 2 and 7 for further discussion on the Company's method for determining the fair value of its assets. The estimated fair value of available-for-sale investments was $ 68,393 at December 31, 2024, and these available-for-sale investments all contractually mature within one year. Changes in market interest rates and bond yields cause certain investments to fall below their cost basis, resulting in unrealized losses on investments. 7. Fair Value Measurements The carrying amount of cash and cash equivalents, receivables, accounts payable, accrued compensation and benefits, and other accrued liabilities approximate fair value due to the short maturity of these instruments. F-29 Table of Contents The following table presents the placement in the fair value hierarchy of financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2024: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2024 Assets United States government debt securities $ — $ 67,474 $ — $ 67,474 Certificates of deposit — 851 — 851 Corporate Bonds — 68 — 68 Total Assets $ — $ 68,393 $ — $ 68,393 Liabilities Warrant liabilities - 2024 Warrants $ — $ — $ 50,537 $ 50,537 Total liabilities $ — $ — $ 50,537 $ 50,537 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, 2023: Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2023 Assets United States government debt securities $ — $ 51,671 $ — $ 51,671 Certificates of deposit — 3,361 — 3,361 Corporate Bonds — 245 — 245 Total Assets $ — $ 55,277 $ — $ 55,277 The method used to estimate the fair value of the Level 2 short-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. Warrant liabilities The Warrant liabilities (as defined below) are comprised of outstanding warrants to purchase 52,666,669 shares of common stock, no par value per share at an exercise price of $ 0.75 per share issued in a private placement in December 2024. The Warrants were accounted for as liabilities as the Warrants provide the holder the right to acquire, via a paid in kind dividend on the Series A Preferred Stock for the first two years following the issue date of the Series A Preferred Stock (see Note 12), a number of additional warrants to purchase shares of common stock equal to 50 % of the amount of such paid in kind dividends divided by the $ 0.75 exercise price ("PIK Warrants"), upon obtaining Shareholder Approval (as defined in Note 12) which fails the requirement of the indexation guidance under ASC 815-40. Furthermore, the Company does not have a sufficient number of authorized and unissued shares available to share settle the instrument and for that reason the Warrants cannot be accounted as an equity-linked instrument. The Warrants and PIK Warrants (together the "Warrant liabilities") are measured at fair value at inception. The fair value of the outstanding Warrants will be re-measured at fair value at the end of each reporting period, unless and until they are reclassified to equity. We use various option pricing models, such as the Black-Scholes option pricing model and the Monte Carlo simulation model, to estimate fair value of the warrants. In using these models, we make certain assumptions about risk-free interest rates, dividend yields, volatility, expected term of the Warrants and other assumptions. Risk-free interest rates are derived from the yield on U.S. Treasury debt securities. Dividend yields are based on our historical dividend payments, which have been zero to date. Volatility is estimated from the historical volatility of our common stock as traded on the Nasdaq. The expected term of the Warrants is based on the time to expiration of the Warrants from the date of measurement. F-30 Table of Contents The fair value of the Warrants is estimated using a Black‑Scholes option-pricing model. The significant assumptions used in preparing the option pricing model for valuing the Warrant liabilities as of December 31, 2024, include (i) volatility of 86 % (discounted for lack of marketability), (ii) risk free interest rate of 4.5 %, (iii) strike price ($ 0.75 ), (iv) fair value of common stock ($ 0.93 ), and (v) expected life of 10 years. The fair value of the PIK Warrants is estimated using a Black-Scholes option pricing model within a Monte Carlo simulation model framework. The significant assumptions used in preparing the simulation model for valuing the PIK Warrant as of December 31, 2024, include (i) volatility of 86 % (discounted for lack of marketability), (ii) risk free interest rate range of 4.13 % to 4.2 %, (iii) strike price ($ 0.75 ), (iii) term to PIK Warrant payment date of one to two years and (vii) expected Company's stock price range to the corresponding PIK Warrant payment date of $ 0.06 to $ 3.05 . See Notes 8 and 9 for discussion of non-recurring fair value estimates used in calculating impairment charges recorded during the years ended December 31, 2024, 2023, and 2022. 8. Property, Plant and Equipment, Net Property, plant and equipment consist of the following: December 31, 2024 2023 Land and land improvements $ 164 $ 164 Buildings and building improvements 2,629 2,629 Furniture and fixtures 364 530 Equipment 16,774 18,576 Leasehold improvements 4,478 4,380 Breeding stock 88 79 Computer hardware and software 3,186 3,459 Construction and other assets in progress 9,019 1,577 36,702 31,394 Less: Accumulated depreciation and amortization ( 22,871 ) ( 24,283 ) Property, plant and equipment, net $ 13,831 $ 7,111 Depreciation expense was $ 1,467 , $ 1,820 , and $ 2,393 for the years ended December 31, 2024, 2023, and 2022, respectively. Recorded impairment losses of $ 598 , $ 445 and $ 638 for the years ended December 31, 2024, 2023, and 2022, respectively, are included in impairment of other noncurrent assets on the accompanying consolidated statement of operations and are primarily related to right-of-use assets and fixed assets at certain of the Company's leased locations. As discussed in Note 1, during 2024, the Company suspended ActoBio's operations. As a result, the Company reviewed the related property, plant and equipment and right-of-use assets for impairment. Based on the estimated undiscounted cash flows, the Company determined that the related asset values were not fully recoverable and calculated estimated fair values using market participant assumptions. The estimated fair values were lower than the carrying values, and the Company recorded impairment losses of $ 110 related to property, plant, and equipment and $ 488 related to the right-of-use assets, which are included in impairment of other noncurrent assets in the accompanying consolidated statements of operations for the year ended December 31, 2024. 9. Goodwill and Intangible Assets, Net The changes in the carrying amount of goodwill for the years ended December 31, 2024, and 2023, are as follows: 2024 2023 Beginning of year $ 26,612 $ 36,923 Impairment ( 7,409 ) ( 10,390 ) Foreign currency translation adjustments ( 64 ) 79 End of year $ 19,139 $ 26,612 F-31 Table of Contents The Company had $ 32,282 and $ 24,873 of cumulative goodwill impairment losses as of December 31, 2024, and 2023. During the second quarter of 2024, in connection with the suspension of ActoBio's operations, as discussed in Note 1, the Company determined the fair value of the ActoBio reporting unit was less than its carrying amount. As a result, the Company recorded a goodwill impairment charge of $ 1,630 , which represented the full amount of goodwill associated with the ActoBio reporting unit. For the year ended December 31, 2024, and December 31, 2023, the Company recorded $ 5,779 and $ 10,390 of impairment charges related to the Exemplar reporting unit, respectively. In connection with the annual 2024 evaluation, the Company completed its calendar year 2025 forecast and revised its outlook for the Exemplar business, resulting in lower financial projections compared to the prior year strategic planning cycle. The revised projections were used as a key input into Exemplar's reporting unit’s annual goodwill impairment test performed as of December 31, 2024. The impairment charge represented the estimated excess of carrying value over fair value of this reporting unit. The Company determined the fair value of the Exemplar reporting unit in both 2024 and 2023 using the income approach in which fair value derived from forecasted future cash flows, discounted at the appropriate rate of return commensurate with the risk as well as current rates of return for equity and debt capital as of the valuation date. The projections incorporated the effect of current market conditions, including revenue growth, customer attrition, operating margins, capital expenditures, and working capital dynamics. The market-based weighted average cost of capital used in the income approach for the Exemplar reporting unit was 13.0 % for 2024 and 12.5 % for 2023, and the terminal growth rate used in the discounted cash flow model was 3 % for both 2024 and 2023. See Note 16 for information regarding goodwill by reportable segment. Intangible assets consist of the following as of December 31, 2024: Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Patents, developed technologies and know-how 10.7 $ 15,912 $ ( 11,457 ) $ 4,455 Intangible assets consist of the following as of December 31, 2023: Gross Carrying Amount Accumulated Amortization Net Patents, developed technologies and know-how $ 82,501 $ ( 41,800 ) $ 40,701 During 2024, in connection with the suspension of ActoBio's operations, the Company determined the fair value of ActoBio's certain developed technologies was less than their carrying amount. As a result, the Company recorded an impairment charge of $ 32,317 , which is included in impairment of other noncurrent assets in the accompanying consolidated statements of operations for the year ended December 31, 2024. Amortization expense was $ 3,059 , $ 4,848 , and $ 4,798 for the years ended December 31, 2024, 2023, and 2022, respectively. Estimated aggregate amortization expense for definite lived intangible assets is expected to be as follows: 2025 $ 1,273 2026 1,273 2027 1,273 2028 636 Total $ 4,455 F-32 Table of Contents 10. Debt Lines of Credit Exemplar has a $ 5,000 revolving line of credit with American State Bank that matures on November 1, 2025. As of December 31, 2024, the line of credit bore interest at 8.00 % per annum. As of December 31, 2024 and December 31, 2023, there was no outstanding balance. 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. The Convertible Notes matured on July 1, 2023, although certain notes were repurchased prior to their maturity beginning in third quarter of 2022. On June 30, 2023, the Company repurchased all remaining outstanding Convertible Notes at par plus accrued interest. The components of interest expense related to the Convertible Notes were as follows: Year Ended December 31, 2023 2022 Cash interest expense $ 397 $ 5,727 Non-cash interest expense 60 1,042 Total interest expense $ 457 $ 6,769 11. Income Taxes The components of loss from continuing operations before income taxes are presented below: Year Ended December 31, 2024 2023 2022 Domestic $ ( 85,879 ) $ ( 93,522 ) $ ( 76,572 ) Foreign ( 42,149 ) ( 2,840 ) ( 3,394 ) Loss from continuing operations before income taxes $ ( 128,028 ) $ ( 96,362 ) $ ( 79,966 ) The components of income tax benefit from continuing operations are presented below: Year Ended December 31, 2024 2023 2022 United States federal income taxes: Deferred $ ( 41 ) $ ( 247 ) $ 37 Foreign income taxes: Current — — ( 39 ) Deferred ( 1,743 ) ( 152 ) ( 198 ) State income taxes: Current 2 21 — Deferred ( 11 ) ( 80 ) 11 Income tax benefit from continuing operations $ ( 1,793 ) $ ( 458 ) $ ( 189 ) F-33 Table of Contents Income tax benefit from continuing operations for the years ended December 31, 2024, 2023, and 2022 differed from amounts computed by applying the applicable United States federal corporate income tax rate of 21% to loss before income taxes as a result of the following: 2024 2023 2022 Computed statutory income tax benefit from continuing operations $ ( 26,886 ) $ ( 20,236 ) $ ( 16,793 ) State and provincial income tax benefit, net of federal income taxes ( 4,092 ) ( 6,693 ) ( 2,884 ) Nondeductible stock based compensation 313 3,417 179 Nondeductible officer compensation 309 278 263 Impairment of goodwill 551 — 101 Nondeductible equity investment loss — — 3,093 Research and development tax incentives ( 1,750 ) ( 1,383 ) ( 991 ) United States-foreign rate differential ( 1,081 ) ( 15 ) 18 Other, net 60 1,109 533 ( 32,576 ) ( 23,523 ) ( 16,481 ) Change in valuation allowance for deferred tax assets 30,783 23,065 16,292 Total income tax benefit from continuing operations $ ( 1,793 ) $ ( 458 ) $ ( 189 ) The tax effects of temporary differences that comprise the deferred tax assets and liabilities included in continuing operations as of December 31, 2024, and 2023, are as follows: 2024 2023 Deferred tax assets Allowance for doubtful accounts $ — $ 48 Equity securities and investments in affiliates 472 413 Property, plant and equipment 237 369 Intangible assets 56,113 64,013 Accrued liabilities 2,478 3,262 Lease liabilities 1,383 1,834 Stock-based compensation 14,205 14,465 Deferred revenue 503 478 Capitalized research and development cost 29,796 23,918 Research and development tax credits 16,232 13,577 Net operating, capital loss, and interest expense carryforwards 283,926 311,154 Total deferred tax assets 405,345 433,531 Less: (Valuation allowance) 404,074 424,432 Net deferred tax assets 1,271 9,099 Deferred tax liabilities Right-of-use assets 1,271 1,830 Foreign intangible asset — 9,116 Total deferred tax liabilities 1,271 10,946 Net deferred tax liabilities included in continuing operations $ — $ ( 1,847 ) F-34 Table of Contents Activity within the valuation allowance for deferred tax assets included in continuing operations during the years ended December 31, 2024, 2023, and 2022 was as follows: 2024 2023 2022 Valuation allowance at beginning of year $ 424,432 $ 401,086 $ 408,396 Increase (decrease) in valuation allowance as a result of Current year continuing operations 30,783 23,065 16,292 Discontinued operations treated as asset sales — — ( 27,909 ) Expired attributes ( 50,269 ) — — Adoption of ASU 2020-06 — — 4,698 Foreign currency translation adjustment ( 872 ) 281 ( 391 ) Valuation allowance at end of year $ 404,074 $ 424,432 $ 401,086 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. Due to the Company and its subsidiaries' histories of net losses incurred from inception, any corresponding net domestic and certain foreign deferred tax assets have been fully reserved as the Company and its subsidiaries cannot sufficiently be assured that these deferred tax assets will be realized. The Company's past issuances of stock and mergers and acquisitions have resulted in ownership changes as defined in Section 382 of the Internal Revenue Code of 1986, as amended ("Section 382"). As a result, utilization of portions of the net operating losses may be subject to annual limitations, however as of December 31, 2024, all such limited losses applicable to Precigen, other than losses inherited via acquisition, have been fully utilized. As of December 31, 2024, approximately $ 35,800 of the Company's domestic net operating losses were inherited via acquisition and are limited based on the value of the target at the time of the transaction. As of December 31, 2024, the Company had net operating loss carryforwards of approximately $ 969,900 for United States federal income tax purposes available to offset future taxable income, including $ 757,000 generated after 2017, United States capital loss carryforwards of $ 100,900 , and United States federal and state research and development tax credits of approximately $ 16,200 , prior to consideration of annual limitations that may be imposed under Section 382 of the Internal Revenue Code of 1986, as amended, or ("Section 382"). Net operating loss carryforwards generated prior to 2018 will expire if unutilized from 2025 to 2037, and capital loss carryforwards will expire if unutilized from 2025 to 2027. As a result of our past stock issuances, as well as due to prior mergers and acquisitions, certain of our net operating losses have been subject to limitations pursuant to Section 382. As of December 31, 2024, we had utilized all net operating losses subject to Section 382 limitations, other than those losses inherited via acquisitions. As of December 31, 2024, approximately $ 69,800 of domestic net operating losses were acquired via acquisition and are limited based on the value of the target at the time of the transaction. Future changes in stock ownership may also trigger an ownership change and, consequently, a Section 382 limitation. As of December 31, 2024, our direct foreign subsidiaries included in continuing operations had foreign loss carryforwards of approximately $ 69,800 , most of which do not expire. T he increase in tax benefit recognized in the twelve months ended December 31, 2024 is primarily caused by the non-cash impairment of ActoBio's developed technology and goodwill, which resulted in the reduction of the associated deferred tax liability, and was recorded as a discrete item during the second quarter of 2024. The Company and its subsidiaries do not have material unrecognized tax benefits as of December 31, 2024. The Company does not anticipate significant changes in the amount of unrecognized tax benefits in the next 12 months. The Company's tax returns for the years 2005 and forward are subject to examination by federal or state tax authorities due to the carryforward of unutilized net operating and capital losses and research and development tax credits. F-35 Table of Contents 12. Mezzanine Equity and Shareholders' Equity Under the Company’s amended and restated articles of incorporation the Company is authorized to issue 400,000,000 shares of common stock and 25,000,000 shares of preferred stock. Amendment to the Articles of Incorporation - Series A Preferred Stock On December 27, 2024, Precigen filed articles of amendment (the “Articles of Amendment”) to its amended and restated articles of incorporation with the State Corporation Commission of the Commonwealth of Virginia ("SCC") , including a form of certificate for the Series A Preferred Stock, designating 81,000 shares of its authorized and unissued preferred stock as 8.00 % Series A Convertible Perpetual Preferred Stock (the "Series A Preferred Stock") and establishing the preferences, limitations and relative rights of the Series A Preferred Stock. The Articles of Amendment became effective following the issuance of a Certificate of Amendment by the SCC to Precigen on December 30, 2024. Issuances of Preferred Stock and Warrants On December 30, 2024, the Company issued 79,000 shares of the Series A Preferred Stock with an initial liquidation preference and stated value of $ 1,000 per share, together with the Warrants (see Note 7), for gross proceeds of $ 79,000 and net proceeds of $ 78,463 , after deducting offering expenses, which had not been paid as of December 31, 2024. The aggregate exercise price of the Warrants is approximately $ 39,500 , exercisable for an aggregate of 52,666,669 shares of common stock. The terms of the Series A Preferred Stock are summarized below. Series A Preferred Stock Rights: Dividend. Dividends on the Series A Preferred Stock will be paid annually in cash at a rate of 8.00 % when, as and if declared by the board of directors of Precigen, except that for the first two years following the issue date of the Series A Preferred Stock, such dividends will be paid in kind in the form of an increase to the stated value and the liquidation preference of the Series A Preferred Stock by the amount of such dividends, together with Warrants to acquire a number of additional shares of common stock equal to 50 % of the amount of such dividends divided by the $ 0.75 exercise price of the Warrants, subject to the Shareholder Approval (as described below). Redemption. The Series A Preferred Stock is redeemable, in whole or in part, for cash at Precigen’s option at any time. The redemption price will be equal to the stated value of the Series A Preferred Stock to be redeemed, plus accumulated and unpaid dividends, if any, to, but excluding, the redemption date. If a fundamental change occurs (as defined in the Articles of Amendment), then holders of the Series A Preferred Stock may require Precigen to repurchase their shares of Series A Preferred Stock for cash. The repurchase price will be equal to the stated value of the shares of Series A Preferred Stock to be repurchased, plus accumulated and unpaid dividends, if any, to, but excluding, the repurchase date. Conversion. The Series A Preferred Stock will be convertible into common stock at the option of the holders of the Series A Preferred Stock at any time on or after the later of the six-month anniversary of the issue date of the Series A Preferred Stock and the date on which Precigen has, among other things, obtained (1) any shareholder approval that may be required under the listing rules of the Nasdaq Global Select Market, (2) any shareholder approval that may be required to increase the number of authorized shares of common stock sufficient to permit the exercise of the Warrants and to permit the conversion of the Series A Preferred Stock into the maximum number of shares of common stock deliverable upon conversion of all shares of Series A Preferred Stock no later than 180 days after December 30, 2024 and (3) the filing with the SCC and effectiveness of an amendment to Precigen’s amended and restated articles of incorporation evidencing such shareholder approval (collectively, the “Shareholder Approval”). The Series A Preferred Stock will also be convertible into common stock at Precigen’s option at any time on or after the third anniversary of the issue date of the Series A Preferred Stock, but only if the closing sale price per share of common stock equals or exceeds $ 4.00 for a specified period of time and certain other conditions are satisfied. The Series A Preferred Stock is initially convertible into shares of common stock at a conversion rate of 888.8888 shares of common stock per $ 1,000 of stated value, for an initial conversion price of approximately $ 1.125 per share. However, if the arithmetic average of the closing sale prices of the common stock over the five trading day period ending on, and including, the last trading day of the fiscal quarter immediately preceding any conversion date exceeds the conversion price otherwise in effect on such conversion date, then the conversion rate for purposes of such conversion will be a number of shares of common stock per $ 1,000 of stated value equal to $ 1,000 divided by such arithmetic average. The conversion rate is also subject to customary adjustments. The Series A Preferred Stock has no maturity date, ranks senior to the outstanding shares of common stock with respect to the payment of dividends and distributions in liquidation and has a liquidation preference equal to its stated value plus any accrued F-36 Table of Contents and unpaid dividends (whether or not declared). Subject to certain limited exceptions, the Series A Preferred Stock and the Warrants are not transferable for six months . Mezzanine Classification ASC 480-10-S99-3A(2) of the SEC's Accounting Series Release N0. 268 ("ASR 268") requires preferred securities that are redeemable for cash or other assets to be classified outside of permanent equity if they are redeemable (i) at a fixed or determinable price on a fixed or determinable date, (ii) at the option of the holder, or (iii) upon the occurrence of an event that is not solely within the control of the issuer. Preferred securities that are mandatorily redeemable are required to be classified by the issuer as liabilities whereas under ASR 268, a company should classify a preferred security whose redemption is contingent on an event not entirely in control of the issuer as mezzanine equity. The Series A Preferred Stock is redeemable at the option of the holder upon a "fundamental change" (as defined in the agreements) that is not solely within control of the Company, and accordingly, the Company determined that mezzanine treatment is appropriate for the Series A Preferred Stock. The Series A Preferred Stock was measured at the amount of total proceeds less any offering costs and proceeds allocated to the Warrants, and is presented as such in our consolidated balance sheets and consolidated statements of changes in mezzanine equity and shareholders’ equity as of and for the year ended December 31, 2024. Further, the Company evaluated all embedded features against an equity-like host and concluded none of the embedded features identified within the Series A Preferred Stock require bifurcation as they are either deemed clearly and closely related or not net settleable as a result of a lack of an active market. Issuances of Precigen Common Stock In August 2024, the Company closed a public offering of 39,878,939 shares of its common stock, resulting in net proceeds to the Company of $ 30,882 , after deducting underwriting discounts, fees, and other offering expenses. This included the sale of 4,584,821 shares of the Company’s common stock pursuant to the underwriter’s exercise of its option to purchase additional shares. Of the 39,878,939 shares, 23,588,234 shares were purchased by related parties and their affiliates, including the Company's Chairman of the Board of Directors and his affiliates, and one of the Company's executive officers. In January 2023, the Company closed a public offering of 43,962,640 shares of its common stock, resulting in net proceeds of $ 72,808 , after deducting underwriting discounts, fees, and other underwriting expenses. Of the 43,962,640 shares issued, 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. The Company completed the offering of shares of common stock, utilizing a number of underwriters, with J.P. Morgan Securities LLC acting as representative of the underwriters. 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. Share Lending Agreement Concurrently with the offering of the Convertible Notes (Note 10), 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 terminated on October 1, 2023, and the Borrowed Shares were returned to Precigen on October 5, 2023, and were recorded as treasury shares at that time. The Share Lending Agreement was entered into at fair value and met the requirements for equity classification. Therefore, the value was netted against the issuance of the Borrowed Shares in additional paid-in capital. Additionally, the Borrowed Shares were not included in the denominator for loss per share attributable to Precigen shareholders. F-37 Table of Contents Components of Accumulated Other Comprehensive (loss) income The components of accumulated other comprehensive (loss) income are as follows: December 31, 2024 2023 Unrealized income (loss) on investments $ 12 $ ( 33 ) Loss on foreign currency translation adjustments — ( 1,914 ) Total accumulated other comprehensive (loss) income $ 12 $ ( 1,947 ) During the year ended December 31, 2024, the Company reclassified $ 2,915 of cumulative foreign translation losses associated with ActoBio upon final closing of its facilities, which is included in other income (expenses) in the accompanying consolidated statements of operations. These translation losses were previously recorded within accumulated other comprehensive (loss) income. 13. Share-Based Payments The Company measures the fair value of stock options, RSUs and PSUs 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. Adjustments to stock-based compensation expense for RSUs and PSUs are made, as needed, each reporting period based on changes in the Company’s estimate of the number of units that are probable of vesting. Stock-based compensation costs included in the consolidated statements of operations are presented below: Year Ended December 31, 2024 2023 2022 Cost of products and services $ 41 $ 72 $ 110 Research and development 2,828 2,237 2,188 Selling, general and administrative 6,602 7,579 7,899 Discontinued operations — — 9 Total $ 9,471 $ 9,888 $ 10,206 Equity Plans In August 2013, Precigen adopted the 2013 Omnibus Incentive Plan (the "2013 Plan"), for employees and nonemployees pursuant to which Precigen's board of directors granted share-based awards, including stock options, restricted stock units, shares of common stock and other awards, to employees, officers, consultants, advisors, and nonemployee directors. Upon the effectiveness of the 2023 Omnibus Incentive Plan (the "2023 Plan") by Precigen's shareholders in June 2023, as discussed in the next paragraph, no new awards may be granted under the 2013 Plan 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 accordance with their original terms and conditions. As of December 31, 2024, there were 16,414,686 stock options and no 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, RSUs, PSUs and other awards, to officers, employees and nonemployees. The 2023 Plan initially authorized for issuance pursuant to awards under the 2023 Plan an aggregate of 18,418,137 shares, which included shares remaining available for issuance under the 2013 Plan as of the adoption of the 2023 Plan. At Precigen's annual meeting of shareholders held on July 5, 2024, shareholders approved an increase of 2,000,000 shares of common stock available for issuance under the 2023 Plan. As of December 31, 2024, there were 5,824,000 stock options, 3,178,000 PSUs and no RSUs outstanding under the 2023 Plan and 7,043,377 shares were available for future grants. 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 December 31, F-38 Table of Contents 2024, there were 12,000,000 shares authorized for issuance under the 2019 Plan, of which 3,686,048 stock options and 826,057 RSUs were outstanding, and 2,448,058 shares were available for grant. Stock Options Stock options may be granted with an exercise price equal to or greater than the stock's fair market value at the date of grant. Stock options may be granted with an exercise price less than the stock's fair market value at the date of grant only if the stock options are replacement options in accordance with certain United States Treasury regulations. All stock options have terms of up to ten -year and vest four years from the date of grant. Stock option activity was as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Balances at December 31, 2021 12,260,187 $ 14.06 6.79 Granted 4,451,890 2.22 Exercised ( 375 ) ( 2.28 ) Forfeited ( 567,179 ) ( 5.19 ) Expired ( 943,247 ) ( 22.32 ) Balances at December 31, 2022 15,201,276 10.41 6.87 Granted 7,847,869 1.19 Exercised — — Forfeited ( 275,250 ) ( 2.65 ) Expired ( 716,555 ) ( 20.41 ) Balances at December 31, 2023 22,057,340 6.90 7.12 Granted 7,361,674 1.40 Exercised ( 265,448 ) ( 1.30 ) Forfeited ( 1,586,732 ) ( 1.72 ) Expired ( 1,642,100 ) ( 17.10 ) Balances at December 31, 2024 25,924,734 5.07 7.05 Exercisable at December 31, 2024 15,384,119 7.42 5.89 Total unrecognized compensation costs related to unvested awards as of December 31, 2024 were $ 10,135 and are expected to be recognized over a weighted-average period of approximately 2.5 years. The weighted average grant date fair value of options granted during 2024, 2023, and 2022 was $ 1.12 , $ 0.92 , and $ 1.65 , respectively. The aggregate intrinsic value of options exercised during 2024, 2023, and 2022 was $ 60 , $ 0 , and $ 0 , respectively. The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of Precigen's common stock for those shares where the exercise price was lower than the fair value of Precigen's common stock on the date of exercise. F-39 Table of Contents PSUs and RSUs In 2024, the Company’s Compensation and Human Capital Management Committee of the Board of Directors (the "Compensation Committee") approved the grant of 3,178,000 PSUs under the 2023 Plan to certain key employees of the Company. Of the PSUs granted, 2,978,000 are subject to vesting in two equal 50 % installments based upon the achievement of two specified operational milestones relating to (i) the Company’s good faith submission to the U.S. Food and Drug Administration (the “FDA”) of a complete BLA for the Company’s PRGN-2012 investigational product and (ii) the approval of the BLA by the FDA. The remaining 200,000 PSUs granted in 2024 are subject to vesting in two equal 50 % installments based on (i) the achievement of the approval of the BLA by the FDA and (ii) continued employment with the Company on the six-month anniversary of the approval of the BLA by the FDA. The performance milestones may be achieved (and the PSUs earned) at any time through December 31, 2026 (the “Performance Period”), and the PSUs will vest and be settled in shares of the Company’s common stock at such time as the Compensation Committee certifies that an applicable performance milestone has been achieved, subject to the employee's continued employment through the applicable achievement date (subject to certain exceptions). Any PSUs for which a performance milestone has not been achieved by the end of the Performance Period will be cancelled and forfeited. The Company recognizes stock-based compensation expense over the performance period, if it is probable that the performance condition will be achieved. Adjustments to stock-based compensation expense are made, as needed, each reporting period based on changes in the Company's estimate of the number of units that are probable of vesting. RSU and PSU activity was as follows: Number of RSUs and PSUs Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term (Years) Balances at December 31, 2021 468,481 $ 8.47 0.33 Granted 1,387,831 2.12 Vested ( 1,125,785 ) ( 4.29 ) Forfeited ( 32,712 ) ( 7.26 ) Balances at December 31, 2022 697,815 2.66 0.13 Granted 4,083,777 1.01 Vested ( 3,820,058 ) ( 1.27 ) Forfeited — — Balances at December 31, 2023 961,534 1.17 0.19 Granted 7,769,484 1.29 Vested ( 4,726,961 ) ( 1.37 ) Forfeited — — Balances at December 31, 2024 4,004,057 1.16 0.55 Total unrecognized compensation costs related to unvested RSU awards as of December 31, 2024 were $ 292 and are expected to be recognized over a weighted-average period of approximately 0.3 years. As of December 31, 2024, the underlying performance milestone relating to the Company's submission of a BLA to the FDA was considered probable of achievement and stock-based compensation expense was recognized during the year ended December 31, 2024 related to this milestone. The underlying performance milestone related to the approval of the BLA by the FDA was determined to be not probable of achievement, as such approval is outside of the Company's control. Therefore, no stock-based compensation expense was recognized for this performance milestone during the year ended December 31, 2024. Precigen uses treasury shares (to the extent available) and authorized and unissued shares to satisfy share award vesting. F-40 Table of Contents 14. 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 less than one year to six 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: Year Ended December 31, 2024 2023 2022 Operating lease costs $ 2,379 $ 2,234 $ 2,444 Short-term lease costs 55 52 170 Variable lease costs 368 384 422 Lease costs $ 2,802 $ 2,670 $ 3,036 As of December 31, 2024, maturities of lease liabilities, excluding short-term and variable leases, for continuing operations were as follows: 2025 $ 1,556 2026 1,433 2027 1,285 2028 1,260 2029 1,295 Thereafter 553 Total 7,382 Present value adjustment ( 1,880 ) Total $ 5,502 Current portion of operating lease liabilities $ 956 Long-term portion of operating lease liabilities 4,546 Total $ 5,502 Other information related to operating leases in continuing operations was as follows: December 31, 2024 2023 Weighted average remaining lease term (years) 4.83 5.39 Weighted average discount rate 11.57 % 11.2 % Year Ended December 31, 2024 2023 2022 Supplemental disclosure of cash flow information Cash paid for operating lease liabilities $ 2,662 $ 2,326 $ 2,493 Operating lease right-of-use assets obtained in exchange for new lease liabilities (includes new leases or modifications of existing leases) 572 399 466 During the years ended December 31, 2024 and 2022 the Company recorded impairment charges related to right-of-use assets. See Note 8 for further discussion. F-41 Table of Contents 15. Commitments and Contingencies Contingencies 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. The complaint named as defendants certain of the Company' directors and certain of the Company's current and former officers. The complaint's claims related to disclosures made by the Company about MBP program from May 10, 2017 to March 1, 2019. 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, also related to disclosures regarding MBP program, demands inspection of certain books and records of the Company pursuant to Virginia statutory and common law. On April 1, 2022, the 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 may result in adverse judgments, unfavorable settlements, or concessions by the Company, or adverse regulatory action, any of which could harm the Company’s business or operations. Moreover, 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 December 31, 2024, 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. 16. Segments The Company's CODM assesses the operating performance of and allocates resources for several operating segments using Segment Adjusted EBITDA. 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 and interest income, (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, (x) reclassification of cumulative translation gain (loss), and (xi) 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. Segment Adjusted EBITDA excludes the gain or loss on disposals of assets and include 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, if any. The Company's CODM is its President and Chief Executive Officer. 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 CODM uses Segment Adjusted EBITDA for each segment in order to evaluate performance and allocate resources, reviewing actual results to budget throughout the year as an input into making those decisions. For the year ended December 31, 2024, 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 year ended December 31, 2024. See Note 2 for a description of Biopharmaceuticals and Exemplar. Segment Adjusted EBITDA by reportable segment was as follows: F-42 Table of Contents Year Ended December 31, 2024 Biopharmaceuticals Exemplar Total Revenues from external customers/Total segment revenues $ — $ 3,925 $ 3,925 Less: Salaries, benefits and other payroll expenses, including severance cost ( 43,363 ) ( 2,879 ) Rent and Utilities ( 3,195 ) ( 706 ) Capital Expenditures ( 8,477 ) ( 47 ) Other Segment Adjusted EBITDA ( 27,252 ) ( 1,222 ) Segment Adjusted EBITDA $ ( 82,287 ) $ ( 929 ) $ ( 83,216 ) Year Ended December 31, 2023 Biopharmaceuticals Exemplar Total Revenues from external customers/Total segment revenues $ 75 $ 6,150 $ 6,225 Less: Salaries, benefits and other payroll expenses ( 40,276 ) ( 3,774 ) Rent and Utilities ( 2,854 ) ( 801 ) Capital Expenditures ( 1,251 ) ( 187 ) Other Segment Adjusted EBITDA ( 31,033 ) ( 2,114 ) Segment Adjusted EBITDA $ ( 75,339 ) $ ( 726 ) $ ( 76,065 ) Year Ended December 31, 2022 Biopharmaceuticals Exemplar Total Revenues from external customers/Total segment revenues $ 14,894 $ 12,015 $ 26,909 Less: Salaries, benefits and other payroll expenses ( 37,624 ) ( 3,771 ) Rent and Utilities ( 4,093 ) ( 745 ) Capital Expenditures ( 1,254 ) ( 141 ) Other Segment Adjusted EBITDA ( 49,465 ) ( 2,361 ) Segment Adjusted EBITDA $ ( 77,542 ) $ 4,997 $ ( 72,545 ) Other Segment EBITDA for each reportable segment in the table above includes: – Biopharmaceuticals – external R&D costs including laboratory supplies, third-party commercialization and manufacturing costs, consultant costs, legal and professional fees, insurance, and certain other overhead expenses and EBITDA adjustments. – Exemplar – cost of sales, external R&D costs including laboratory supplies, sales and marketing expenses, third-party consultants, supplies, insurance, and certain overhead expenses and EBITDA adjustments. Total segment revenues from reportable segments equal total consolidated revenues. F-43 Table of Contents The table below reconciles Segment Adjusted EBITDA for reportable segments to consolidated net loss from continuing operations before income taxes: Year Ended December 31, 2024 2023 2022 Segment Adjusted EBITDA for reportable segments $ ( 83,216 ) $ ( 76,065 ) $ ( 72,545 ) Remove cash paid for capital expenditures net of proceeds from sale of assets 8,524 1,438 1,395 Interest Income 1,418 3,237 133 Add recognition of previously deferred revenue associated with upfront and milestone payments — — 14,561 Other expenses: Interest expense ( 6 ) ( 468 ) ( 6,774 ) Depreciation and amortization ( 4,526 ) ( 6,668 ) ( 7,191 ) Gain (loss) from disposals of assets 2 72 — Impairment losses ( 40,324 ) ( 10,835 ) ( 1,120 ) Stock-based compensation expense ( 9,471 ) ( 9,888 ) ( 10,197 ) Adjustment related to accrued bonuses paid in equity awards 3,039 3,361 1,698 Equity in net income (loss) of affiliates — — 862 Shares issued for payment of services ( 553 ) ( 545 ) ( 575 ) Other — ( 1 ) ( 107 ) Reversal of cumulative foreign translation losses ( 2,915 ) — — Eliminations — — ( 106 ) Consolidated loss from continuing operations before income taxes $ ( 128,028 ) $ ( 96,362 ) $ ( 79,966 ) For the years ended December 31, 2024, 2023, and 2022, 58.1 %, 74.6 %, and 59.6 % of total Exemplar segment revenue was attributable to four customers in 2024 and four for 2023 and 2022, respectively. The Company recognized revenues derived in foreign countries totaling $ 0 for the years ended December 31, 2024, 2023 and $ 233 for the year ended December 31, 2022, respectively. Goodwill by reportable segment was as follows: Biopharmaceuticals Exemplar Total Goodwill Balances at December 31, 2022 $ 16,847 $ 20,076 $ 36,923 Impairments — ( 10,390 ) $ ( 10,390 ) Foreign currency translation adjustments 79 — 79 Balances at December 31, 2023 16,926 9,686 26,612 Foreign currency translation adjustments ( 64 ) — ( 64 ) Impairments ( 1,630 ) ( 5,779 ) ( 7,409 ) Balances at December 31, 2024 $ 15,232 $ 3,907 $ 19,139 As of December 31, 2024 and 2023, the Company had $ 0 and $ 1,958 , respectively, of long-lived assets in foreign countries. 17. Defined Contribution Plans The Company sponsors defined contribution plans covering employees who meet certain eligibility requirements. The Company makes contributions to the plans in accordance with terms specified in the plan agreement. The Company's contributions to the plans were $ 417 , $ 178 , and $ 564 for the years ended December 31, 2024, 2023, and 2022, respectively. F-44