PRECIGEN, INC.PGEN
PRECIGEN, INC. Fair Value Disclosure
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.
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, 2025 (there were no financial liabilities measured at fair value on a recurring basis as of December 31, 2025):
| Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | December 31, 2025 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| United States government debt securities | $ | — | $ | 66,676 | $ | — | $ | 66,676 | |||||||||||||||
| Certificates of deposit | — | 3,398 | — | 3,398 | |||||||||||||||||||
| Corporate Bonds | — | 61 | — | 61 | |||||||||||||||||||
| Total assets | $ | — | $ | 70,135 | $ | — | $ | 70,135 | |||||||||||||||
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 method used to estimate the fair value of the Level 2 short-term and long-term debt investments in the tables above is based on professional pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets.
Term Loans
Due to the variable rate nature of the Term Loans, the Company believes that the carrying amount approximates fair value at December 31, 2025.
Warrant liabilities
The Warrant liabilities as of December 31, 2024 (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").
As of December 31, 2024, the Warrants were accounted for as liabilities as the Warrants provided the holder the right to acquire, via a paid in kind ("PIK") 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 PIK dividends divided by the $0.75 exercise price ("PIK Warrants"), which failed the requirement of the indexation guidance under ASC 815-40. The Warrants and PIK Warrants (together the "Warrant liabilities") were measured at fair value at inception and the fair value of the outstanding Warrants were re-measured at the end of each of the previous reporting periods and then again at the date of which the Warrant liabilities were reclassified to shareholders' equity, which occurred in the third quarter of 2025.
In connection with the Series A Preferred Stock conversion in September 2025 (see Note 12 for further discussion), the preferred shareholders forfeited their rights to the PIK dividends as the conversion occurred prior to the first of the two stated PIK dividend dates. As a result, as of the conversion date and going forward, the warrants met the equity scope exception to be classified in shareholders’ equity and are not subject to remeasurement, provided that the Company continues to meet the criteria for equity classification.
For the Year Ended December 31, 2025, the Company recorded a non-cash expense representing the change in the fair value of the Warrant liabilities in the amount of approximately $139,523 on the accompanying consolidated statements of operations, resulting in Warrant liabilities of $190,060 as of September 17, 2025, when the Series A Preferred Stock was converted to common stock. The Warrant liabilities, after being remeasured, were reclassified to additional paid-in capital within shareholders' equity.
The changes in the fair value of the Warrant liabilities measured utilizing Level 3 inputs for the Year Ended December 31, 2025 were as follows:
| Warrant liabilities as of December 31, 2024 | $ | 50,537 | |||
| Change in fair value of Warrant liabilities | 139,523 | ||||
| Reclassification of Warrant liabilities to equity | (190,060) | ||||
| Warrant liabilities as of December 31, 2025 | $ | — | |||
Prior to the reclassification of the Warrant liabilities to equity, the Company used various option pricing models, such as the Black-Scholes option pricing model and the Monte Carlo simulation model, to estimate the fair value of the Warrant liabilities. In using these models, the Company made 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 Stock Market Exchange. The expected term of the Warrants was based on the time to expiration of the Warrants from the date of measurement.
The fair value of the Warrants was 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 September 17, 2025 (the date the Warrant liabilities qualified for permanent equity classification), include (i) volatility of 88.5% (discounted for lack of marketability), (ii) risk free interest rate of 4.0%, (iii) strike price ($0.75), (iv) fair value of common stock ($3.82), and (v) expected life of 9 years, 3 months, 15 days. As of December 31, 2024, the significant assumptions included (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 was estimated using a Black-Scholes option pricing model within a Monte Carlo simulation model framework. As of December 31, 2024 , the significant assumptions included (i) volatility of 86% (discounted for lack of marketability), (ii) risk free interest rate range of 4.1% to 4.2%, (iii) strike price ($0.75), (iii) term to PIK Warrant payment date of to two years, and (vii) expected Company's stock price range to the corresponding PIK Warrant payment date of $0.06 to $3.05.
Preferred Stock - PIK Dividends
On December 30, 2024, the Company issued in a private placement 79,000 shares of its 8.00% Series A Convertible Perpetual Preferred Stock (the "Series A Preferred Stock") and warrants to purchase an aggregate of 52,666,669 shares of its common stock (the "Warrants") at an exercise price of $0.75, for gross proceeds of $79,000. In accordance with the Articles of Amendment to the Company's amended and restated articles of incorporation, on each PIK dividend payment date, the stated value of the Series A Preferred Stock shall automatically be increased by the accumulated PIK dividend amount. The PIK dividends were determined to be discretionary and as such, they are measured at fair value as of the date they accumulate. Due to the absence of retained earnings, the adjustment to record the value of the PIK dividends was recorded as a reduction to additional paid-in capital. No PIK dividend was required to be accrued as of December 31, 2025 as a result of the Series A Preferred Stock conversion that occurred in September 2025. See Note 12 for further discussion on the Series A Preferred Stock conversion and PIK dividends.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 25, 2026 | Showing above |
| 2024 | Mar 19, 2025 | |
| 2023 | Mar 19, 2024 | |
| 2022 | Mar 6, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 1, 2018 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Feb 29, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.