Company: PGEN
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001356090-25-000034
Chunk: 87

Company: PRECIGEN, INC.
Filing Date: 2025-11-13
Form: 10-Q
Item: Part I, Item 8
Chunk 87
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 of debt instruments based on their contractual terms and features, including any embedded derivatives or conversion options. As of September 30, 2025, the Company’s outstanding long-term debt (Note 9) includes a five-year term loan entered into on September 3, 2025, which is accounted for at amortized cost. The loan does not contain any equity conversion features and is not designated at fair value. As of September 30, 2025, the entire outstanding balance of the Company’s debt was classified as long-term, as no principal payments are due within twelve months of the reporting date.The debt agreement includes certain financial and non-financial covenants. The Company evaluates compliance with these covenants on a quarterly basis and, as of September 30, 2025, was in compliance with all applicable covenants.WarrantsThe 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 Accounting Standards Codification ("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 warrants that are liability-classified, changes in fair value are included in Change in fair value of warrant liabilities in the Condensed Consolidated Statements of Operations. If facts and circumstances lead the warrant liability to be reclassified to shareholders' equity, warrant 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 redeem