PRECIGEN, INC.PGEN
PRECIGEN, INC. Income Taxes Disclosure
Income Taxes
The components of loss from continuing operations before income taxes are presented below:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| United States | $ | (250,719) | $ | (85,879) | $ | (93,522) | |||||||||||
| Foreign | 80 | (42,149) | (2,840) | ||||||||||||||
| Total | $ | (250,639) | $ | (128,028) | $ | (96,362) | |||||||||||
The components of income tax expense (benefit) from continuing operations are presented below:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current tax expense | |||||||||||||||||
| US federal | — | — | — | ||||||||||||||
| US state and local | 3 | 2 | 21 | ||||||||||||||
| Foreign | — | — | — | ||||||||||||||
| Total current tax expense | 3 | 2 | 21 | ||||||||||||||
| Deferred tax (benefit) | |||||||||||||||||
| US federal | — | (41) | (247) | ||||||||||||||
| US state and local | — | (11) | (80) | ||||||||||||||
| Foreign | — | (1,743) | (152) | ||||||||||||||
| Total deferred tax (benefit) | — | (1,795) | (479) | ||||||||||||||
| Total income tax expense (benefit) | |||||||||||||||||
| US federal | — | (41) | (247) | ||||||||||||||
| US state and local | 3 | (9) | (59) | ||||||||||||||
| Foreign | — | (1,743) | (152) | ||||||||||||||
| Total income tax expense (benefit) | $ | 3 | $ | (1,793) | $ | (458) | |||||||||||
There were no significant tax payments made to any jurisdiction, or state income tax expense incurred, during the periods presented above.
Income tax expense (benefit) for the years ended December 31, 2025, 2024, and 2023 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:
Year Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||
| US federal statutory income tax rate | (52,634) | 21.0 | % | (26,886) | 21.0 | % | (20,236) | 21.0 | % | |||||||||||||||||
| Domestic federal | ||||||||||||||||||||||||||
| Research and development tax credits | (1,200) | 0.5 | % | (1,750) | 1.4 | % | (1,146) | 1.2 | % | |||||||||||||||||
| Nontaxable and nondeductible items | ||||||||||||||||||||||||||
| Stock based compensation | 3 | — | % | 313 | (0.2) | % | 3,417 | (3.5) | % | |||||||||||||||||
| Change in fair value of warrants | 29,300 | (11.7) | % | 61 | — | % | — | — | % | |||||||||||||||||
| Other | 1,631 | (0.7) | % | 333 | (0.3) | % | 324 | (0.3) | % | |||||||||||||||||
| Change in valuation allowance | 23,820 | (9.5) | % | 19,831 | (15.5) | % | 15,758 | (16.4) | % | |||||||||||||||||
| Other | (903) | 0.4 | % | (794) | 0.6 | % | 867 | (0.9) | % | |||||||||||||||||
| Domestic state and local income taxes, net of federal effect | 3 | — | % | (7) | — | % | (42) | — | % | |||||||||||||||||
| Foreign | ||||||||||||||||||||||||||
| Belgium | ||||||||||||||||||||||||||
| Statutory income tax rate differential | 3 | — | % | (1,081) | 0.8 | % | 34 | — | % | |||||||||||||||||
| Impairment of goodwill | — | — | % | 551 | (0.4) | % | — | — | % | |||||||||||||||||
| Other | — | — | % | 770 | (0.6) | % | (414) | 0.4 | % | |||||||||||||||||
| Change in valuation allowance | (20) | — | % | 6,866 | (5.4) | % | 895 | (0.9) | % | |||||||||||||||||
| Other foreign jurisdictions | — | — | % | — | — | % | 85 | (0.1) | % | |||||||||||||||||
| Total income tax expense (benefit) | $ | 3 | — | % | $ | (1,793) | 1.4 | % | $ | (458) | 0.5 | % | ||||||||||||||
The tax effects of temporary differences that comprise the deferred tax assets and liabilities as of December 31, 2025, and 2024, are as follows:
| 2025 | 2024 | ||||||||||
| Deferred tax assets | |||||||||||
| Equity securities and investments in affiliates | 517 | 472 | |||||||||
| Property, plant and equipment | 302 | 237 | |||||||||
| Intangible assets | 47,753 | 56,113 | |||||||||
| Accrued liabilities | 2,789 | 2,478 | |||||||||
| Lease liabilities | 1,220 | 1,383 | |||||||||
| Stock-based compensation | 13,472 | 14,205 | |||||||||
| Deferred revenue | 56 | 503 | |||||||||
| Capitalized research and development cost | 21,224 | 29,796 | |||||||||
| Research and development tax credits | 17,928 | 16,232 | |||||||||
| Net operating, capital loss, and interest expense carryforwards | 285,791 | 283,926 | |||||||||
| Total deferred tax assets | 391,052 | 405,345 | |||||||||
| Less: Valuation allowance | 389,936 | 404,074 | |||||||||
| Net deferred tax assets | 1,116 | 1,271 | |||||||||
| Deferred tax liabilities | |||||||||||
| Right-of-use assets | 1,116 | 1,271 | |||||||||
| Total deferred tax liabilities | 1,116 | 1,271 | |||||||||
| Net deferred tax liabilities included in continuing operations | $ | — | $ | — | |||||||
Activity within the valuation allowance for deferred tax assets included in continuing operations during the years ended December 31, 2025, 2024, and 2023 was as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Valuation allowance at beginning of year | $ | 404,074 | $ | 424,432 | $ | 401,086 | |||||||||||
| Increase (decrease) in valuation allowance as a result of | |||||||||||||||||
| Current year operations | 10,069 | 30,783 | 23,065 | ||||||||||||||
Expired attributes | (26,394) | (50,269) | — | ||||||||||||||
| Foreign currency translation adjustment | 2,187 | (872) | 281 | ||||||||||||||
| Valuation allowance at end of year | $ | 389,936 | $ | 404,074 | $ | 424,432 | |||||||||||
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 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. As of December 31, 2025, approximately $31,466 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, 2025, the Company had net operating loss carryforwards of approximately $1,120,424 for United States federal income tax purposes available to offset future taxable income, including $911,880 generated after 2017, United States capital loss carryforwards of $1,372, and United States federal and state research and development tax credits of approximately $17,880, 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 2026 to 2037, and capital loss carryforwards will expire if unutilized from 2027 to 2029. 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. Future changes in stock ownership may also trigger an ownership change and, consequently, a Section 382 limitation. As of December 31, 2025, our direct foreign subsidiaries included in continuing operations had foreign loss carryforwards of approximately $80,104, most of which do not expire.
The Company and its subsidiaries do not have material unrecognized tax benefits as of December 31, 2025. The Company's U.S. tax returns for the years 2006 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.
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 Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.