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. 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 annual report on Form 10-K (“Annual Report”) 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 ability to retain or recruit, or adapt to changes required in, its founders, senior executives, key personnel or directors;
factors relating to the business, operations and financial performance of Ginkgo, including:
Ginkgo’s ability to effectively manage its growth;
Ginkgo’s exposure to the volatility and liquidity risks inherent in holding equity interests in certain of its customers;
rapidly changing technology 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 reliance on its customers to develop, produce and manufacture products using the engineered cells and/or biomanufacturing processes that Ginkgo develops;
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;
intense competition and competitive pressures from other companies worldwide in the industries in which the combined company will operate;
litigation and the ability to adequately protect Ginkgo’s intellectual property rights; and
other factors detailed under the section entitled “Risk Factors.”
These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this Annual Report are more fully described under the heading “Risk Factors” and elsewhere in this report. The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this Annual Report 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.
Risk Factors Summary
Investing in our securities involves risks. You should carefully consider the risks described in “Risk Factors” beginning on page 51 before making a decision to invest in our Class A common stock. If any of these risks actually occur, our business,
financial condition and results of operations would likely be materially adversely affected. Some of the risks related to Ginkgo’s business and industry are summarized below. References in the summary below to “we,” “us,” “our” and “the Company” generally refer to Ginkgo.
Our business could have to restructure, we may not meet expectations of investors, or we may have materially different financial results than expected, any of which could have a significant negative effect on our financial condition, results of operations and stock price, which could cause you to lose some or all of your investment.
If we were to be deemed an “investment company” under the Investment Company Act of 1940, as amended (“Investment Company Act”), applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.
Our multi-class stock structure entitles only our employees and directors to acquire and hold Ginkgo Class B common stock which has a greater number of votes per share than Ginkgo Class A common stock, which may affect whether stockholders hold or purchase Ginkgo Class A common stock.
Issuing Ginkgo Class C common stock may increase concentration of voting power in Ginkgo Class B common stock, which could discourage potential acquisitions of our business and could have an adverse effect on the trading price of Ginkgo Class A common stock.
Our history of net losses is expected to continue, and we may never achieve or maintain profitability.
We may need substantial additional capital in the future in order to fund our business.
If we fail to effectively manage our rapid growth, then our business, results of operations and financial condition could be adversely affected.
Our limited operating history makes it difficult to evaluate our current business and future prospects.
We currently own and may in the future own equity interests in other operating companies, including certain of our customers; consequently, we have exposure to the volatility and liquidity risks inherent in holding their equity and overall operational and financial performance of these businesses.
Failure to pursue strategic acquisitions and investments, achieve projected milestones or maintain and expand customer partnerships could have an adverse impact on our business.
Failure to secure laboratory equipment and third-party suppliers could cause delays in our research, development or production capacity and adversely affect our business.
We are subject to regulatory and legal scrutiny for our use of genetically modified organisms (“GMOs”), biological, hazardous, flammable and/or regulated materials and DNA sequencing synthesis.
Our reputation could be damaged by third parties’ use of our engineered cells and accompanying production processes.
If our customers discontinue using or are not successful in developing, producing and manufacturing products using the engineered cells and/or biomanufacturing processes that we develop, our future financial position may be adversely impacted.
Our revenue, results of operations, cash flows and reputation in the marketplace may suffer upon the loss of a significant customer.
Our business partners may make announcements about the status of our collaborations, and the price of our common stock may decline as a result of announcements of unexpected results or developments.
Uncertainty about COVID-19 or another global pandemic could materially affect how we and our business partners are operating and may harm our business and results of operations.
Decline in COVID-19 testing, decline in our capacity to test or disruption of our telehealth relationships may harm our business and results of operations.
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We may be subject to liability if the COVID-19 tests we utilize in our testing programs provide inaccurate results.
Failure to pursue new opportunities and develop our platform could make our products obsolete or non-competitive in the market.
The market may be skeptical of our novel and complex technology and use of genetically modified plant or animal cells and genetically modified proteins and biomaterials (collectively, “Genetically Modified Materials”), which could limit public acceptance of our products or processes and limit our revenues.
Failure to protect or enforce our intellectual property rights, trade secrets and inventions could harm our business, results of operations and financial condition and may result in litigation.
Risks related to intellectual property developed under U.S. federally funded research grants and contracts.
Our use of genetic resources and sequencing may subject us to obligations under the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization (the “Nagoya Protocol”).