💩New Chapter 11 Bankruptcy Filing - Zymergen Inc.💩

Simpson-led UCC extracts additional value out of insider buyer, Ginkgo Bioworks

Back on October 3, 2023, CA-based Zymergen Inc. and three (3) direct affiliates (the “debtors”) filed chapter 11 cases in the District of Delaware (Judge Owens) and we could hardly give a sh*t, to be honest. We attempted review of the first day papers on multiple occasions and every time we did we couldn’t get past this banger of an intro sentence:

Zymergen, which was founded in April 2013, is a science and material innovation company focused on designing, developing and commercializing bio-based products for use in a variety of industries.

😴😴😴😴😴

Like, seriously, folks, we’ve read that sentence 10x and still have no f*cking clue what it actually means. Maybe this bit will help:

Starting in late 2019 and early 2020, Zymergen shifted to a revenue model focused on using its proprietary platform and expertise to develop, market, and commercialize its own bio-based products, seeking to provide more sustainable alternatives as compared to traditional chemical companies that often use petrochemicals for product development. In December 2020, Zymergen launched its initial product, Hyaline, the first in a planned franchise of optical films, designed for electronics companies to use for display touch sensors in personal devices and other applications.

Right. Much clearer. 🤯🔫

Ok, fine, whatever. Some tech sh*t. And even better: some tech sh*t that IPO’d in April ‘21, raising ~$530mm.

Oh wow. A successful IPO, huh? Well, not exactly. Apparently the S-1 was a wee bit optimistic about the company’s prospects, particularly around Hyaline. By August ‘21 — yes, a mere four months post-IPO — the company disclosed issues surrounding customer adoption of Hyaline and concluded that “…its prior estimates of near-term demand had been overly optimistic.” WHOOPS. HOW UTTERLY UNCHARACTERISTIC OF ‘21! 🙄. At or around the time of that announcement, the company’s CEO got unceremoniously sh*tcanned while the company’s stock price plummeted 70% basically overnight; the company discontinued Hyaline in November ‘21. And you bet your a$$ that litigation ensued!!

As did a sale process (in late ‘21 … the IPO ink had barely dried). By the end of July ‘22, the company’s board determined that a merger with a company called Ginkgo Bioworks Holdings Inc. (“Ginkgo) was in the best interests of the company and its shareholders. Per the debtors:

Zymergen’s board believed that the merger would result in a leading synthetic biology company with enhanced scale and capabilities that will enable it to better address various execution risks and uncertainties and withstand industry challenges and macroeconomic risks. For Ginkgo, the transaction would lead to the integration of Zymergen’s automation, software, and data science tools, along with biological assets to enhance the opportunities of Ginkgo’s platform.

After a shareholder vote, the merger closed in October ‘22.