Company: PGEN
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001356090-25-000034
Chunk: 36

Company: PRECIGEN, INC.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 1
Chunk 36
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 liabilities are remeasured as of the event date and reclassified from liabilities to shareholders' equity. In the third quarter of 2025, the Warrant liabilities were reclassified to shareholders' equity and will no longer be adjusted to fair value at each reporting period.Mezzanine EquityWhere 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 is 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. In the event convertible preferred shares utilize a conversion term that results in the delivery of a variable number of shares of common stock upon conversion as compared to the original terms of the 

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agreement, such conversion will be treated as a redemption. If classification of an equity instrument as temporary equity is no longer required, the existing carrying amount of the equity instrument should be reclassified to permanent equity at the date of the event that caused the reclassification.In the third quarter of 2025, all of the holders of preferred stock converted their shares to common stock (see Note 11). Use of EstimatesThe 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 Issued Accounting Pronouncements Not Yet AdoptedIn November 2024, the FASB issued ASU 2024-03, in order to