zy-20211103
0001645842FALSE00016458422021-11-032021-11-03

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 

FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 3, 2021
 

Zymergen Inc.
(Exact Name of Registrant as Specified in Charter)
 

Delaware001-4035446-2942439
(State or Other Jurisdiction of
Incorporation)
(Commission File Number)(IRS Employer Identification No.)
5980 Horton Street, Suite 105
Emeryville CA 94608
(Address of Principal Executive Offices) (Zip Code)

(415801-8073
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
 
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.001 par value per shareZYNasdaq Global Select Market




Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.
Item 2.02  Results of Operations and Financial Condition.
On November 3, 2021, Zymergen Inc. (the "Company") issued a press release announcing the Company’s preliminary financial results for its fiscal quarter ended September 30, 2021. A copy of this press release, titled “Zymergen Reports Preliminary Third Quarter 2021 Financial Results and Provides Business Update”, is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(a) - (c) Not applicable.
(d) Exhibits.
Exhibit
Number
  Description
99.1  
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
The information in this report, including the exhibit hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 Zymergen Inc..
 
Date: November 3, 2021
By:/s/ Mina Kim
  Name: Mina Kim
  Title:   Chief Legal Officer

Document

Zymergen Reports Preliminary Third Quarter 2021 Financial Results and Provides Business Update

Emeryville, Calif., November 3, 2021 – Zymergen Inc. (“Zymergen” or the “Company”), a leading biofacturing company, today reported preliminary financial results for the third quarter ended September 30, 2021.

Since the previous business update in August, the Company has reviewed potential market opportunities and its related portfolio, using a rigorous evaluation process applied to current and potential market segments. As a result of this review, the Company will focus on a smaller number of programs that it believes capitalize on its capabilities and provide clear commercial opportunities.

Accordingly, several programs will be discontinued, including:
The electronics film programs, with the exception of ZYM0101, which is being developed in partnership with Sumitomo Chemical. Emerging data on the market segment being targeted with Hyaline and other electronics films indicates a smaller near-term opportunity than previously expected
The consumer care programs, including insect repellent, ZYM0201. Based on the portfolio review, the costs of customer acquisition with a direct-to-consumer model were prohibitive and, in the case of ZYM0201, it could not be produced and distributed at a price point competitive with incumbent products.

As a result of these changes, the Company eliminated approximately 220 positions across a variety of levels and functions. These decisions, along with a reduction in related overhead spending, are expected to slow the Company’s cash burn rate sufficiently to operate to the middle of 2023 with cash on hand.

As part of the portfolio review, two programs in the healthcare market have been promoted: one for development of key enzymes used in vaccine production, and a second in drug discovery, both of which build on previously existing programs and leverage core company capabilities. The Company has also continued to see success with its work in agriculture, particularly with a flagship program on nitrogen fixation where it is working with a partner, and is still evaluating other programs that are in early concept stages.

“We have made significant progress on a number of the objectives we laid out in our August update, including a review and focusing of our portfolio, strengthening our Commercial organization, our product development and launch process, and extending our cash runway,” said acting Zymergen CEO, Jay Flatley. “We are pleased with our progress and remain focused on our strategy of pursuing continuous launches of breakthrough products.”



Preliminary Third Quarter 2021 Financial Results
Total revenue for the third quarter of 2021 was $4.1 million, all relating to R&D service agreements and collaboration revenue. Total operating expenses for the third quarter of 2021 were $99.3 million, including total restructuring charges of $21.2 million and a reversal of accrued performance bonuses of approximately $9.4 million. Net loss in the third quarter of 2021 was $98.2 million.

Cash and cash equivalents were $496.2 million as of September 30, 2021, excluding restricted cash of $10.8 million.

The financial results presented in this press release are preliminary, estimated and unaudited. They are subject to the completion and finalization of Zymergen’s financial and accounting closing procedures. They reflect management’s estimates based solely upon information available to management as of the date of this press release. Further information learned during that completion and finalization may alter the final results. In addition, the preliminary estimates should not be viewed as a substitute for full quarter financial statements prepared in accordance with GAAP. There is a possibility that Zymergen’s third quarter financial results could vary materially from these preliminary estimates. Accordingly, you should not place undue reliance upon this preliminary information.

Additional information regarding the Company’s third quarter 2021 financial results will be available in the Company’s Form 10-Q, which will be filed with the U.S. Securities and Exchange Commission (the “SEC”).

Webcast Information
Zymergen will host a conference call to discuss the preliminary third quarter 2021 financial results after market close on Wednesday, November 3, 2021, at 1:30 pm Pacific Time / 4:30 pm Eastern Time. A webcast of the conference call can be accessed at https://investors.zymergen.com/

About Zymergen
Zymergen is a biofacturing company using biology to reimagine the world. Zymergen partners with nature to design, develop and manufacture bio-based breakthrough products that can deliver value to customers in a broad range of industries. A unique combination of biology, chemistry, software and automation enables the company to design and create new materials.




Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements are based on the Company’s beliefs and assumptions and on information currently available to it on the date of this press release. In some cases, you can identify these statements by forward-looking words such as “may,” “will,” “continue,” “anticipate,” “intend,” “could,” “project,” “expect” or the negative or plural of these words or similar expressions. Forward-looking statements in this press release, include but are not limited to statements regarding the Company’s preliminary financial results, focusing of the Company’s portfolio, strengthening of the Company’s Commercial organization and launch process, reducing the Company’s costs sufficiently to support its operations to the middle of 2023 with cash on hand, the Company’s ability to capitalize on its core capabilities and the alignment of its product portfolio to such capabilities, the commercial opportunities on which the Company is focused and the Company’s ability to execute on such opportunities, including opportunities in the healthcare market, and the Company’s strategy of pursuing continuous launches of breakthrough products. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements, including, but not limited to, risks relating to the Company’s ability to successfully commercialize or generate revenue from its products; the Company’s ability to develop or execute on its new strategic plan; the Company’s ability to reduce its operating costs and extend its cash runway; and material differences between the Company’s actual financial results and the preliminary financial results presented herein. These and other risks are described more fully in the Company’s filings with the SEC, including the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, and other documents the Company subsequently files with the SEC, including the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021. Except to the extent required by law, the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Investor Contact
Carrie Mendivil/Mary Kate McDonough
investors@zymergen.com

Media Contact
Mike Dulin
mdulin@zymergen.com
502-777-2029





PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(unaudited)


Three Months Ended
September 30,
Nine Months Ended
September 30,
2021202020212020
Revenue$4,082 $3,208 $13,704 $7,378 
Operating expenses:
Cost of service revenue17,179 21,047 60,138 63,721 
Research and development39,073 21,703 129,036 60,986 
Sales and marketing3,977 4,354 18,753 14,477 
General and administrative17,906 14,410 60,898 44,713 
Restructuring charges21,193 — 21,193 — 
Total operating expenses99,328 61,514 290,018 183,897 
Loss from operations(95,246)(58,306)(276,314)(176,519)
Other income (expense):
Interest income32 62 451 
Interest and other expense(3,008)(3,538)(7,421)(10,630)
Total other expense(3,001)(3,506)(7,359)(10,179)
Loss before income taxes(98,247)(61,812)(283,673)(186,698)
(Provision for) benefit from income taxes18 (4)26 102 
Net loss$(98,229)$(61,816)$(283,647)$(186,596)
Net loss per share attributable to common stockholders, basic$(0.96)$(4.92)$(4.39)$(15.47)
Net loss per share attributable to common stockholders, diluted$(0.96)$(4.92)$(4.40)$(15.47)
Weighted-average shares used in computing net loss per share to common stockholders, basic102,337,242 12,559,912 64,662,332 12,058,855 
Weighted-average shares used in computing net loss per share to common stockholders, diluted102,337,242 12,559,912 64,812,356 12,058,855 





PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)



As of September 30, 2021As of December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$496,247 $210,205 
Accounts receivable, billed and unbilled2,625 4,175 
Inventory6,210 4,969 
Other current assets11,482 9,225 
Total current assets516,564 228,574 
Property and equipment, net54,572 48,718 
Goodwill33,841 11,604 
Intangible assets, net9,153 4,790 
Other assets13,206 11,235 
Total assets$627,336 $304,921 
LIABILITIES AND CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable, accrued and other liabilities$37,017 $38,985 
Short-term debt, net80,221 79,331 
Other current liabilities3,414 3,142 
Total current liabilities120,652 121,458 
Warrant liabilities— 14,231 
Other long-term liabilities29,868 12,170 
Total liabilities150,520 147,859 
Convertible preferred stock— 900,798 
Total stockholders' equity (deficit)476,816 (743,736)
Total liabilities and convertible preferred stock and stockholders' equity (deficit)$627,336 $304,921