dna-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________________________________

FORM 10-Q

______________________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

Commission File Number: 001-40097

______________________________________________

GINKGO BIOWORKS HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

______________________________________________


Delaware			87-2652913
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

27 Drydock Avenue 8th Floor Boston, MA			02210
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (877) 422-5362

______________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

DNA

NYSE

Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share

DNA.WS

NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 2, 2024, the registrant had 1,709,063,953 shares of Class A common stock, 382,214,015 shares of Class B common stock and 120,000,000 shares of non-voting Class C common stock outstanding.

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Cautionary Note Regarding Forward Looking Statements

This report includes forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of Ginkgo Bioworks Holdings, Inc. (“Ginkgo”). These statements are based on the beliefs and assumptions of the management of Ginkgo. Although Ginkgo believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, Ginkgo cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes”, “estimates”, “expects”, “projects”, “forecasts”, “may”, “will”, “should”, “seeks”, “plans”, “scheduled”, “anticipates” or “intends” or similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•Ginkgo’s ability to raise financing in the future and to comply with restrictive covenants related to long-term indebtedness;

•Ginkgo’s ongoing remediation efforts with respect to its identified material weakness in internal control over financial reporting;

•factors relating to the business, operations and financial performance of Ginkgo, including:

◦the performance and output of Ginkgo’s cell engineering and biosecurity platforms;

◦Ginkgo’s ability to effectively manage its growth, including its anticipated approach to inorganic growth and related impacts on Ginkgo’s financial performance;

◦Ginkgo’s ability to realize near-term and long-term cost savings associated with our site consolidation plans, including the ability to terminate leases or find sub-lease tenants for unused facilities;

◦Ginkgo’s exposure to the volatility and liquidity risks inherent in holding equity interests in certain of its customers;

◦rapidly changing technology, including in relation to artificial intelligence (“AI”), and extensive competition in the synthetic biology industry that could make the products and processes Ginkgo is developing obsolete or non-competitive unless it continues to collaborate on the development of new and improved products and processes and pursue new market opportunities;

◦Ginkgo’s expected stabilization in operational overhead costs in 2024;

◦Ginkgo’s ability to attract new customers and generate additional demand for its services, Ginkgo’s reliance on its customers to develop, produce and manufacture products using the engineered cells and/or biomanufacturing processes that Ginkgo develops and Ginkgo’s ability to accurately predict customer demand, including with respect to the data we access and hold;

◦the anticipated growth of Ginkgo’s biomonitoring and bioinformatic support services, its expanding epidemiology capabilities and potential impact on the ability to predict pathogen emergence and evolution, its international expansion and the relative value of the services on Ginkgo’s future Biosecurity revenue;

◦Ginkgo’s ability to comply with laws and regulations applicable to its business; and

◦market conditions and global and economic factors beyond Ginkgo’s control, including initiatives undertaken by the U.S. government in the biotechnology sector, the frequency and scale of biological risks and threats, and the future potential and commercial applications of AI and the biotechnology sector.

Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Applicable risks and uncertainties include, among others:

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•intense competition and competitive pressures from other companies worldwide in the industries in which Ginkgo operates;

•litigation, including securities or shareholder litigation, and the ability to adequately protect Ginkgo’s intellectual property rights;

•the success of Ginkgo’s programs, the growth of Ginkgo’s biomonitoring and bioinformatic support services, and their potential to contribute revenue, and the relative contribution of Ginkgo’s programs to its future revenue, including the potential for future revenue related to downstream value to be in the form of potential future milestone payments, royalties, and/or equity consideration; and

•other factors in this Quarterly Report on Form 10-Q and the Company’s 2023 Annual Report on Form 10-K

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Quarterly Report on Form 10-Q are more fully described under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and the Company’s 2023 Annual Report on Form 10-K and elsewhere in this report. which are not exhaustive. Other sections of this Quarterly Report on Form 10-Q describe additional factors that could adversely affect the business, financial condition or results of Ginkgo. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can Ginkgo assess the impact of all such risk factors on the business of Ginkgo, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to Ginkgo or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. Ginkgo undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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		Page

PART I.	FINANCIAL INFORMATION	1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	38
Item 6.	Exhibits	38
Signatures		39

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Ginkgo Bioworks Holdings, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except per share data)


	As of March 31,		As of December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	840,440	$	944,073
Accounts receivable, net	24,189		17,157
Accounts receivable - related parties	370		742
Prepaid expenses and other current assets	38,021		39,777
Total current assets	903,020		1,001,749
Property, plant, and equipment, net	195,992		188,193
Operating lease right-of-use assets	220,785		206,801
Investments	76,021		78,565
Intangible assets, net	77,407		82,741
Goodwill	47,909		49,238
Other non-current assets	60,627		58,055
Total assets	$	1,581,761	$	1,665,342
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	26,995	$	9,323
Deferred revenue (includes $707 and $5,426 from related parties)	33,612		44,486
Accrued expenses and other current liabilities	108,436		110,051
Total current liabilities	169,043		163,860
Non-current liabilities:
Deferred revenue, net of current portion (includes $123,549 and $119,053 from related parties)	166,067		158,062
Operating lease liabilities, non-current	234,497		221,835
Other non-current liabilities	24,884		24,433
Total liabilities	594,491		568,190
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 200,000 shares authorized; none issued	—		—
Common stock, $0.0001 par value (Note 6)	202		199
Additional paid-in capital	6,445,058		6,385,997
Accumulated deficit	(5,456,439)		(5,290,528)
Accumulated other comprehensive (loss) income	(1,551)		1,484
Total stockholders’ equity	987,270		1,097,152
Total liabilities and stockholders’ equity	$	1,581,761	$	1,665,342

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Ginkgo Bioworks Holdings, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except per share data)


	Three Months Ended March 31,
	2024		2023
Cell Engineering revenue (1)	$	27,889	$	34,096
Biosecurity revenue:
Product	—		11,666
Service	10,055		34,940
Total revenue	37,944		80,702
Costs and operating expenses:
Cost of Biosecurity product revenue	—		4,541
Cost of Biosecurity service revenue	9,202		17,834
Research and development	136,457		162,639
General and administrative	70,287		111,433
Total operating expenses	215,946		296,447
Loss from operations	(178,002)		(215,745)
Other income (expense):
Interest income, net	11,711		14,545
Loss on equity method investments	—		(1,449)
Loss on investments	(2,544)		(6,370)
Change in fair value of warrant liabilities	940		1,204
Other income, net	2,015		2,928
Total other income (expense)	12,122		10,858
Loss before income taxes	(165,880)		(204,887)
Income tax expense	31		82
Net loss	$	(165,911)	$	(204,969)
Net loss per share, basic and diluted	$	(0.08)	$	(0.11)
Weighted average common shares outstanding:
Basic	2,004,460		1,914,963
Diluted	2,005,336		1,916,637
Comprehensive loss:
Net loss	$	(165,911)	$	(204,969)
Other comprehensive (loss) income:
Foreign currency translation adjustment	(3,035)		1,018
Total other comprehensive (loss) income	(3,035)		1,018
Comprehensive loss	$	(168,946)	$	(203,951)

(1)Includes related party revenue of $733 and $4,703 for the three months ended March 31, 2024 and 2023, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Ginkgo Bioworks Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(in thousands)


	Three Months Ended March 31, 2023
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance as of December 31, 2022	1,891,976	$	190	$	6,136,378	$	(4,397,659)	$	(2,632)	$	1,736,277
Issuance of common stock upon exercise or vesting of equity awards	41,904	4		12		—		—		16
Settlement of contingent consideration - restricted stock	—	—		2,262		—		—		2,262
Stock-based compensation expense	—	—		72,982		—		—		72,982
Foreign currency translation	—	—		—		—		1,018		1,018
Net loss	—	—		—		(204,969)		—		(204,969)
Balance as of March 31, 2023	1,933,880	$	194	$	6,211,634	$	(4,602,628)	$	(1,614)	$	1,607,586


	Three Months Ended March 31, 2024
	Common Stock
	Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance as of December 31, 2023	2,001,315	$	199	$	6,385,997

SEC Form 10-Q filed by Ginkgo Bioworks Holdings Inc.