10q10k10q10k.net

What changed in Ginkgo Bioworks Holdings, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Ginkgo Bioworks Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+550 added−761 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-29)

Top changes in Ginkgo Bioworks Holdings, Inc.'s 2024 10-K

550 paragraphs added · 761 removed · 358 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

107 edited+80 added−255 removed62 unchanged
Biggest changeToday, our services cross markets and modalities to enable a wide range of biotech products, including, but not limited to, the discovery, optimization, and manufacturing systems for: • DNA sequences delivered as vaccines and gene therapies • RNA sequences for vaccines, therapeutics, and novel approaches to crop protection, including mRNA, circular RNA, and other approaches • Proteins used in food and alternative meat and dairy, protein-based materials such as silk and structural proteins such as collagen or keratin, biologic medicines and antibodies, plant traits for crop protection, AAV capsids and other delivery methods for gene therapies and vaccines • Enzymes used in industrial processing, food production and brewing, bioremediation and biomining, chemical manufacturing and biocatalysis, diagnostics, therapeutics, or RNA vaccine production • Small molecules and natural products that can be produced via pathways of multiple enzymes in engineered cells for cosmetics and food ingredients, specialty or commodity chemicals, materials, agricultural inputs, or pharmaceutical ingredients and adjuvants • Microbial cells that can provide crop nutrition or protection in agriculture, impact soil carbon sequestration to help address climate change, offer probiotic nutritional benefits, or microbiome therapeutics • Mammalian cells for manufacturing of biologics, genomic medicines, and cell therapies 5 Table of Contents A common platform across markets enables economies of scale to accrue in unexpected and powerful ways—an enzyme library generated for production of a fragrance might generate negative data that trains an AI model which in turn could empower design of an enzyme used to produce a treatment for a rare disease; models of RNA structure enable improved expression of both food proteins and novel therapeutics.
Biggest changeToday, our services span markets and modalities to enable a wide range of biotech products, including, but not limited to, systems for the discovery, optimization, and manufacturing of: • DNA sequences delivered as vaccines and gene therapies, • RNA sequences for vaccines and therapeutics including mRNA, circular RNA, and other approaches, • Proteins used in biologic medicines and antibodies, adeno-associated virus (“AAV”) capsids and other delivery methods for gene therapies, vaccines, plant traits for crop protection, and food and alternative meat and dairy, • Enzymes used in biocatalysis, diagnostics, therapeutics, and RNA vaccine production, • Small molecules and natural products that can be produced via pathways of multiple enzymes in engineered cells for pharmaceutical ingredients and adjuvants, agricultural biochemicals, cosmetics and food ingredients, and specialty or commodity chemicals, • Microbial cells that can provide crop nutrition or crop protection in agriculture, impact soil carbon sequestration to help address climate change, and microbiome therapeutics, and 3 Table of Contents • Mammalian cells for manufacturing of biologics, genomic medicines, and cell therapies.
The fundamental advantage of our platform over traditional cell engineering done by hand at our customers’ labs is that our platform improves with scale while in-house cell engineering in our customers' labs largely does not.
The fundamental advantage of our cell engineering platform over traditional cell engineering done by hand at our customers’ labs is that our platform improves with scale while in-house cell engineering in our customers' labs largely does not.
Synthetic biologists build cell programs by writing new sequences combining regulatory and functional elements into a synthesized strand of DNA and booting them up in cells to perform useful tasks, usually producing a particular bioproduct such as a protein, enzyme, or chemical. Biological code programs the world of atoms, not bits.
Synthetic biologists build cell programs by writing new sequences combining regulatory and functional elements into a synthesized strand of DNA and booting them up in cells to perform useful tasks, usually producing a particular bioproduct such as RNA, protein, enzyme, or chemical. Biological code programs the world of atoms, not bits.
At the same time, there is great promise in how AI tools may help uncover new disease biology and targets for therapeutics, as well as enable the programming of new medicines, in particular biologics and genomic medicines that are encoded in DNA and RNA sequences.
At the same time, there is great promise in how AI tools may help uncover new disease biology and targets for therapeutics, as well as enable the programming of new medicines, in particular biologics and genomic medicines that are directly encoded in DNA and RNA sequences.
In addition to our employees, our success would not be possible without the collaboration and support of the broad network of partners, contractors, contingent workers and temporary staff who make up the Ginkgo team. Technologies reflect the values of the people who build them.
In addition to our employees, our success would not be possible without the collaboration and support of the network of partners, contractors, contingent workers and temporary staff who make up the Ginkgo team. Technologies reflect the values of the people who build them.
It produces proteins that catalyze chemical reactions that interact in a complex web of connections. Even the simplest cell programs encounter incredible complexity within, emerging from all of the interactions of chemicals, DNA, RNA, and proteins inside of a cell.
It produces proteins that catalyze chemical reactions that interact in a complex web of connections. Even the simplest cell programs encounter incredible complexity, emerging from all of the interactions of chemicals, DNA, RNA, and proteins inside of a cell.
This is what makes the potential impact of synthetic biology so great, and inspires us to work to make biology easier to engineer and secure. But it also poses incredible challenges that make cell programming so hard today. Our code is a physical object with chemical properties. It folds and binds and interacts in many complex ways.
This is what makes the potential impact of cell engineering so great, and inspires us to work to make biology easier to engineer and secure. But it also poses incredible challenges that make cell programming so hard today. Our code is a physical object with chemical properties. It folds and binds and interacts in many complex ways.
Federal Trade Commission (“FTC”), U.S. Department of Agriculture (“USDA”), U.S. Drug Enforcement Administration (“DEA”) and U.S. Environmental Protection Agency ("EPA"), as well as comparable authorities in foreign jurisdictions and various state and local authorities in the United States. Failure to comply with applicable regulations may result in enforcement actions, civil or criminal sanctions, and adverse publicity.
Federal Trade Commission (“FTC”), U.S. Department of Agriculture (“USDA”), U.S. Drug Enforcement Administration (“DEA”) and U.S. Environmental Protection Agency (“EPA”), as well as comparable authorities in foreign jurisdictions and various state and local authorities in the United States. Failure to comply with applicable regulations may result in enforcement actions, civil or criminal sanctions, and adverse publicity.
Laboratory Licensing and Certification Requirements The clinical laboratories we partnered with for our COVID-19 testing program are subject to federal oversight under the Clinical Laboratory Improvement Amendment of 1988 ("CLIA"), which requires all clinical laboratories to meet certain quality assurance, quality control and personnel standards. Laboratories also must undergo proficiency testing and are subject to inspections.
Laboratory Licensing and Certification Requirements The clinical laboratories we partnered with for our COVID-19 testing program are subject to federal oversight under the Clinical Laboratory Improvement Amendment of 1988 (“CLIA”), which requires all clinical laboratories to meet certain quality assurance, quality control and personnel standards. Laboratories also must undergo proficiency testing and are subject to inspections.
It also advances a framework to go beyond a reactive historical frame for ESG that has often positioned genetic engineering as a risk to the environment rather than a value. We recognize that platforms across other industries have lessons—many negative—on how to steward their development and use.
It also advances a framework to go beyond a reactive historical frame that has often positioned genetic engineering as a risk to the environment rather than a value. We recognize that platforms across other industries have lessons—many negative—on how to steward their development and use.
There is an enormous breadth of products—chemicals, enzymes, and proteins—already produced via biotechnology today or being actively developed by companies across markets, across food and nutritional ingredients, wellness, cosmetics, and personal care, industrial processes and chemicals, and materials innovation.
Industrial Biotechnology There is an enormous breadth of products—chemicals, enzymes, and proteins—already produced via biotechnology today or being actively developed by companies across many markets, including food and nutritional ingredients, wellness, cosmetics, and personal care, industrial processes and chemicals, and materials innovation.
As such, a key focus area for us is reducing the barriers to adoption for the platform by de-risking the upfront investment for earlier-stage companies and by helping larger companies integrate their scientists closely into our workflows and empower their scientists to manage requests directly so we feel more like a resource and partner than a fully outsourced provider.
As such, a key focus area for us is reducing the barriers to adoption for the platform by decreasing the upfront investment for earlier-stage companies and by helping larger companies integrate their scientists closely into our workflows and empower their scientists to manage requests directly so we feel more like a resource and partner than a fully outsourced provider.
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health 31 Table of Contents information privacy and security laws, including HIPAA, and federal and state consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, including HIPAA, and federal and state consumer protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.
An introduction to biosecurity: scaling biological intelligence for securing lives and livelihoods Addressing biosecurity starts with being clear-eyed about biological risks and threats. We hold at our core the tremendous positive potential of biology, and we know that we’re facing a biological landscape with more frequent, more severe, and more varied threats through time.
Biosecurity: scaling biological intelligence for securing lives and livelihoods Addressing biosecurity starts with being clear-eyed about biological risks and threats. We hold at our core the tremendous positive potential of biology, and we know that we’re facing a biological landscape with more frequent, more severe, and more varied threats through time.
While the specific means by which effective controls and procedures are achieved may vary, security practices may include use of cages, surveillance cameras and inventory reconciliations. Records must be maintained for the handling of all controlled substances, and, in certain scenarios, periodic reports made to the DEA.
While the specific means by which effective controls and procedures are achieved may vary, security practices may include use of cages, surveillance cameras and inventory reconciliations. Records must be maintained for the handling of all controlled substances, and, in 19 Table of Contents certain scenarios, periodic reports made to the DEA.
While we believe the siloed nature of these companies limits their long-term potential, in the near-term, we may have a harder time penetrating those end markets given the incumbent vertical specialists in that space. The vast majority of these companies exist within therapeutic end markets given the history of cell engineering in that field.
While we believe the siloed nature of these companies limits their long-term potential, in the near-term, we may have a harder time penetrating those end markets given the incumbent vertical specialists in that space. The vast majority of these companies exist within therapeutic end markets given the history of cell engineering in that market segment.
We must avoid creating capabilities that cause harm in ways that aren’t or can’t be mitigated. We must avoid reinforcing inequities in the uses of technologies and to 8 Table of Contents whom their benefits accrue—thereby claiming to change the world but changing not much at all.
We must avoid creating capabilities that cause harm in ways that aren’t or can’t be mitigated. We must avoid reinforcing inequities in the uses of technologies and to whom their benefits accrue—thereby claiming to change the world but changing not much at all.
Genetically Modified Materials Regulations Our technologies and the technologies of our customers involve the use of genetically modified cells, organisms and biomaterials, including, without limitation, GMOs and genetically modified microorganisms ("GMMs"), and their respective products.
Genetically Modified Materials Regulations Our technologies and the technologies of our customers involve the use of genetically modified cells, organisms and biomaterials, including, without limitation, GMOs and genetically modified microorganisms (“GMMs”), and their respective products.
The FDA can also withdraw marketing authorization for the applicable product, and in 29 Table of Contents the case of a product subject to an EUA, the FDA may require EUA holders to transition to permanent marketing authorization which could impact some of the tests in our supply chain.
The FDA can also withdraw marketing authorization for the applicable product, and in the case of a product subject to an EUA, the FDA may require EUA holders to transition to permanent marketing authorization which could impact some of the tests in our supply chain.
The solutions and applications offered by potential competitors vary in size, breadth, and scope, and given our broad set of application areas, we could face competition in many different forms. We face competition from customers’ internal R&D departments and other research solution providers that largely conduct genetic engineering by-hand.
The services and products offered by potential competitors vary in size, breadth, and scope, and given our broad set of application areas, we could face competition in many different forms. We face competition from customers’ internal R&D departments and other research solution providers that largely conduct genetic engineering by-hand.
It builds trust and credibility not only in our capabilities but those of our customers. It motivates and enables our employee-owners to drive the platform towards the many diverse uses they co-envision with our platform (our social and motivational flywheel!).
It builds trust and credibility not only in our capabilities but those of our customers. It motivates and enables our employee-owners to drive the platform towards the many diverse uses they co-envision with our platform.
We identify the following three groups as our principal set of competitors: The Status Quo: “on prem” cell programming efforts The main source of competition we encounter is from potential customers choosing to build or maintain in-house cell engineering teams and capabilities.
We identify the following three groups as our principal set of competitors: Cell Engineering competition The Status Quo: “on prem” cell programming efforts The main source of competition we encounter for our end-to-end cell engineering solutions offerings is from potential customers choosing to build or maintain in-house cell engineering teams and capabilities.
This status quo includes building out laboratory space and then hiring a team of highly trained scientists to conduct research, largely “by-hand” and with limited scale efficiencies.
This status quo includes building out laboratory space and then hiring a team of highly trained scientists to conduct research, largely “by-hand” and with 15 Table of Contents limited scale efficiencies.
As we partner with national governments, we also face competition from homegrown public solutions to particular vertical challenges, especially among high-income countries and large multilaterals with little history of engagement with the private sector.
As we partner with national governments, we also face competition from 16 Table of Contents homegrown public solutions to particular challenges, especially among high-income countries and large multilaterals with little history of engagement with the private sector.
Pharma R&D teams are looking for ways to generate and federate data to train these models, design and test more technical approaches and candidates at the preclinical stage to “fail fast” before costly clinical trials, and develop better leads simultaneously optimizing along multiple dimensions important for therapeutic index as well as manufacturability and cost.
Pharmaceutical R&D teams are looking for ways to generate and federate data to train better AI models, design and test more technical approaches, drive candidates at the preclinical stage to “fail fast” before costly clinical trials, and develop better leads by simultaneously optimizing along multiple dimensions important for therapeutic index as well as manufacturability and cost.
Recent advances in machine learning, molecular simulation, and other computational techniques also hold great promise to improve our ability to program cells. We believe our Foundry is well-positioned to build the kind of large, well-structured datasets that such computational approaches need to succeed.
Datapoints Recent advances in ML, molecular simulation, and other computational techniques hold great promise to improve our ability to program cells. We believe our Foundry is well-positioned to build the kind of large, well-structured datasets that such computational approaches need to succeed.
Because engineering biology is incredibly hard, biotech R&D is traditionally performed by in-house labs filled with highly trained scientists running lab experiments by hand over several years in the hope of ultimately developing a working product.
Because engineering biology is difficult and unpredictable, biotech R&D is traditionally performed by in-house labs filled with highly trained scientists running lab experiments by hand over several years in the hope of ultimately developing a working product.
There is also widespread realization within the pharmaceutical industry that research productivity must be enhanced in order to meet this need. With billions of dollars spent annually on R&D in pharma, the cost to bring a new drug to market is only increasing.
There is also widespread realization across the pharmaceutical industry that research productivity must be enhanced in order to meet this need. Yet, even with hundreds of billions of dollars spent annually on pharmaceutical R&D, the cost to bring a new drug to market is only increasing.
The pharmaceutical industry today relies heavily on outsourced R&D, both to specialized, innovative small biotech, as well as to CROs that can automate and scale specific common workflows at different stages of the R&D process for enhanced efficiency. These approaches enable access to both innovation and efficiency, but suffer from high switching costs both organizationally as well as technically.
The pharmaceutical industry today relies heavily on outsourced R&D, both to specialized, innovative small biotech, as well as to contract research organizations (“CROs”) that can automate and scale specific common workflows at different stages of the R&D process for enhanced efficiency. These approaches enable access to both innovation and efficiency, but incur high switching costs both organizationally and technically.
We face competition from a small number of companies who operate in single biosecurity verticals, such as wastewater monitoring (e.g., Verily and Biobot, both primarily in the US) and digital biosurveillance and modeling (e.g., 26 Table of Contents BlueDot, Airfinity, and the Public Health Company), as well as internationally from BGI, China’s national champion for sequencing and diagnostics.
We face competition from a small number of companies who operate in focused biosecurity verticals, such as wastewater monitoring (e.g., Verily and Biobot, both primarily in the U.S.) and digital biosurveillance and modeling (e.g., BlueDot, Airfinity, and the Public Health Company), as well as internationally from BGI, China’s national champion for sequencing and diagnostics.
Our cell programming services enable discovery, functional optimization, and efficient manufacturing of biotech products Because all organisms run on the same DNA code, general-purpose cell programming can be applied across many different markets to enable the design of new innovative products as well as improve manufacturing cost and sustainability of existing ones.
Because all organisms run on the same DNA code, general-purpose cell programming can be applied across many different markets to enable the design of new innovative products as well as improve manufacturing cost and sustainability of existing ones.
FDA regulation We provide cell engineering and product discovery services to customers engaged in the manufacture of foods, cosmetics and pharmaceutical products.
FDA regulation We provide cell engineering and product discovery services to customers engaged in the manufacture of pharmaceutical, food, and cosmetic products.
In addition to developing our patent portfolio, we license patents from third parties. We intend to pursue additional patent protection to the extent that we believe that it would be beneficial and cost-effective. We cannot provide any assurance that any of our current or future patent applications will result in the issuance of patents.
We intend to pursue additional patent protection to the extent that we believe that it would be beneficial and cost-effective. We cannot provide any assurance that any of our current or future patent applications will result in the issuance of patents.
This limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the election of directors, the approval of certain employee compensation plans, the adoption of certain amendments to our organizational documents and the approval of 25 Table of Contents any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.” Competition To our knowledge, there are currently no other cell engineering companies that serve all industries covered by our horizontal cell programming platform.
This limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the election of directors, the approval of certain employee compensation plans, the adoption of certain amendments to our organizational documents and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.” Competition To our knowledge, there are currently no other cell engineering companies that serve the same breadth of industries that we do.
The bioradar data from given programs or jurisdictions are integrated with other global data sources—from our monitoring network, open-source intelligence capability, and other sources—and analyzed using a suite of AI/ML-enabled tools to help customers gain a more comprehensive picture of the threats they’re facing.
The Canopy data from given programs or jurisdictions are integrated with other global data sources—from our monitoring network, open-source intelligence capability, and other sources—and analyzed using a suite of computational tools to help customers gain a more comprehensive picture of the biothreats they’re facing.
DEA regulation We are engaged in the research, development, and export of certain products that may be regulated as controlled substances, including microbes designed to generate precursors to cannabinoids or other chemical intermediates. The Controlled Substances Act of 1970, as amended from time to time, establishes registration, security, recordkeeping, reporting, storage, distribution and other requirements administered by the DEA.
DEA regulation We are engaged in the research, development, and export of certain products that may be regulated as controlled substances. The Controlled Substances Act of 1970, as amended from time to time, establishes registration, security, recordkeeping, reporting, storage, distribution and other requirements administered by the DEA.
As designers of the largest horizontal platform for cell programming, we are keenly aware of the need to care about how our platform is used. More significant than the impacts we have seen from digital platforms on our social world, biology is 24 Table of Contents our health, our bodies, our food, and our environment.
We are keenly aware of the need to care about how our platform is used. More significant than the impacts we have seen from digital platforms on our social world, biology is our health, our bodies, our food, and our environment.
As we build the tools for programming biology, we must also care how those tools are used, and ensure that the risks and benefits are transparently and equitably shared. A diverse, world-class team As of December 31, 2023 we had 1,218 employees.
As we build the tools for programming biology, we must also care how those tools are used, and ensure that the risks and benefits are transparently and equitably shared. 14 Table of Contents A talented, world-class team As of December 31, 2024 we had 834 employees.
Our software, automation, data, information technology, DevOps and information security functions utilize various third party software and information technology service providers, including AWS, for data storage and processing. We also routinely engage a variety of third parties for professional services, contract employment services and consulting services.
We utilize various third party software and information technology service providers, including Google Cloud and Amazon Web Services, for data storage and processing. We also routinely engage a variety of third parties for professional services, contract employment services and consulting services.
Cell engineering Our cell engineering customers work with biology to do incredible things, with transformative potential across industries: • in medicine, developing innovative new therapeutics and vaccines; • in agriculture, advancing the sustainability and security of our food systems; and • in industrial biotechnology, advancing the way we manufacture a wide range of products for better performance and lower environmental impact.
Cell engineering Our cell engineering customers work with biology to discover and manufacture new products that have transformative potential across industries: • in medicine, developing innovative new therapeutics and vaccines; • in agriculture, advancing the sustainability and security of our food systems; • in industrial biotechnology, advancing the way we manufacture a wide range of products for better performance and lower environmental impact; and • in government, advancing new R&D priorities of strategic importance to the United States and its allies.
First, we charge service fees for Foundry services, in much the same way that cloud computing companies charge usage fees for utilization of computing capacity or CROs charge for services.
For each of these programs, we generate economic value in two primary ways. First, we charge service fees for Foundry services, in much the same way that cloud computing companies charge usage fees for utilization of computing capacity or CROs charge for services.
And increasingly, they are also innovating in soil carbon sequestration and climate strategies. 6 Table of Contents Our customers in agriculture are using our platform to improve the performance and manufacturability of existing agricultural biologics, develop revolutionary new products for crop nutrition in nitrogen fixation, phosphate solubilization, or carbon sequestration, and design new insect control proteins and other crop protection products to protect food security.
Our customers in agriculture use our services to improve the performance and manufacturability of existing agricultural biologics, develop revolutionary new products for crop nutrition in nitrogen fixation, phosphate solubilization, or carbon sequestration, and design new insect control proteins and other crop protection products to protect food security.
Biology runs on a digital code. It’s just A, T, C, and G rather than 0 and 1. There are sequences that code for programming logic—turning genes on when certain conditions are met—and there are sequences that encode functions and behaviors—the physical structures of proteins and enzymes that create biological structures and materials or catalyze chemical reactions.
There are sequences that code for programming logic—turning genes on when certain conditions are met—and there are sequences that encode functions and behaviors—the physical structures of proteins and enzymes that create biological structures and materials or catalyze chemical reactions.
We have acted as a systems integrator and authorized distributor of certain COVID-19 over-the counter diagnostic tests manufactured by independent third parties. We worked with laboratory partners that provide surveillance testing services as part of the COVID-19 and other pathogen surveillance testing services we offer, and these tests and test kits may be subject to regulation by the FDA.
We worked with laboratory partners that provide surveillance testing services as part of the COVID-19 and other pathogen surveillance testing services we offer, and these tests and test kits may be subject to regulation by the FDA.
In the United States, the FDA, the USDA through its APHIS, and the EPA are the primary agencies that regulate the use of GMOs, GMMs and potential products derived from GMOs or GMMs or Genetically Modified Materials, pursuant to the Coordinated Framework for the Regulation of Biotechnology.
In the United States, the FDA, the USDA through its APHIS, and the EPA are the primary agencies that regulate the use of GMOs, GMMs and potential products derived from GMOs or GMMs or Genetically Modified Materials, pursuant to the Coordinated Framework for the Regulation of Biotechnology. 20 Table of Contents The FDA reviews the safety of food consumed by humans and of feed consumed by animals under the Federal Food, Drug and Cosmetic Act (“FDCA”).
No assurances can be given that we or our partner laboratories will pass all future licensure or certification inspections. 30 Table of Contents Our facilities and laboratories hold local, state and federal permits, licenses and registrations necessary for compliance in specific work and operations, including from the Massachusetts Water Resource Authority, Boston Fire Department, Massachusetts Department of Environmental Protection, Boston Public Health Commission, Cambridge Biosafety Committee, Massachusetts Department of Public Health, USDA and DEA.
Our facilities and laboratories hold local, state and federal permits, licenses and registrations necessary for compliance in specific work and operations, including from the Massachusetts Water Resource Authority, Boston Fire Department, Massachusetts Department of Environmental Protection, Boston Public Health Commission, Cambridge Biosafety Committee, Massachusetts Department of Public Health, USDA and DEA.
Specifically, APHIS is responsible for regulating the introduction (i.e., importation, interstate movement or release into the environment) of certain GMOs and plants under the plant pest provisions in the PPA to ensure that they do not pose a plant pest risk. APHIS finalized changes to the PPA’s implementing regulations with respect to certain GMOs in May 2020.
USDA's APHIS examines whether a plant itself presents a “plant pest” risk under the Plant Protection Act (“PPA”). Specifically, APHIS is responsible for regulating the introduction (i.e., importation, interstate movement or release into the environment) of certain GMOs and plants under the plant pest provisions in the PPA to ensure that they do not pose a plant pest risk.
Patents generally have a term of twenty years from the date they are filed. As our patent portfolio has been built over time, the remaining terms of the individual patents across our patent portfolio vary. No single patent or patent family is essential to Ginkgo as a whole or to any of Ginkgo’s subsidiaries.
As our patent portfolio has been built over time, the remaining terms of the individual patents across our patent portfolio vary. No single patent or patent family is essential to Ginkgo as a whole or to any of Ginkgo’s subsidiaries. In addition to developing our patent portfolio, we license patents from third parties.
A culture built on care We’ve strived to grow a culture based on care. As engineers, it is easy to fall into the trap of thinking of ourselves simply as tool builders. Tools can be used in many different ways, both good and bad, and engineers often discuss their tools as value neutral.
As engineers, it is easy to fall into the trap of thinking of ourselves simply as tool builders. Tools can be used in many different ways, both good and bad, and engineers often discuss their tools as value neutral. But tools reflect the social beliefs and biases of the people who make them.
This dynamic creates opportunities for outsized returns as our clients successfully commercialize products built on our platform. As we add more programs to the platform over time, we expect downstream value share to contribute income, and therefore we believe our overall margins and cash flow profile will grow significantly.
As we add more programs to the platform over time, we expect downstream value share to contribute income, and therefore we believe our overall margins and cash flow profile for our end-to-end cell engineering solutions will grow significantly.
Because we typically do not incur material downstream costs (e.g., manufacturing or product development, which our customers manage), these value share payments flow through with approximately 100% contribution margin.
Because we typically do not incur material downstream costs (e.g., manufacturing or product development, which our customers manage), these value share payments flow through with approximately 100% contribution margin. We are quite flexible and have structured a variety of value sharing mechanisms, including royalties, lump-sum milestones, and equity payments.
Our customers are using our platform to develop new manufacturing methods for gene therapies, biologics, and small molecule therapeutics and APIs, and to discover new natural products, RNA therapeutics, and much more.
Our pharmaceutical and biotechnology customers use our services to develop new manufacturing methods for gene therapies, biologics, vaccines, and small molecule therapeutics and active pharmaceutical ingredients (“APIs”), and to discover new RNA therapeutics, natural products, and much more.
We employ a variety of safeguards to protect our information and trade secrets, including contractual arrangements with our employees, consultants, contractors and other advisors that impose obligations of confidentiality, assignment of inventions, and security; digital security measures; and physical security precautions. 27 Table of Contents We require confidentiality and material transfer agreements from third parties that receive our confidential data or materials, and we also incorporate confidentiality and material transfer precautions into our collaboration agreements.
We employ a variety of safeguards to protect our information and trade secrets, including contractual arrangements with our employees, consultants, contractors and other advisors that impose obligations of confidentiality, assignment of inventions, and security; digital security measures; and physical security precautions.
Other possible entrants We may also face competition from new entrants in the market, including well-capitalized technology companies with possible strategic interests in synthetic biology and its capabilities.
Similarly, we compete with integrated automation companies like HighRes Biosolutions, Automata, and Thermo Fisher Scientific with our RAC laboratory automation products. Other possible entrants We may also face competition from new entrants in the market, including well-capitalized technology companies with possible strategic interests in synthetic biology and its capabilities.
In addition, certain state laws, such as the California Confidentiality of Medical Information Act, govern the privacy and security of health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
In addition, certain state laws, such as the California Confidentiality of Medical Information Act, govern the privacy and security of health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. 21 Table of Contents States including California, Virginia, Colorado, Connecticut and Utah have also enacted comprehensive privacy laws that are currently in effect, and similar laws have been passed or are being considered in several other states, as well as at the federal and local levels.
As our platform grows, so too does our power to enable and shape many impacts we care about. While we are proud of our direct impacts on making biology easier to engineer, most of the world cares about the impacts on the world that we indirectly enable through helping our customers with the products and services they deliver.
While we are proud of our direct impacts on making biology easier to engineer, most of the world cares about the impacts on the world that we indirectly enable through helping our customers with the products they deliver. We grow as a platform precisely because we help create more value for our customers and the world than we capture.
Our customers leverage our services to improve the manufacturing efficiency and COGS of their existing biotechnological products, develop new production processes to replace existing extraction methods for ingredients derived from plant or animal sources to enable more sustainable and stable supply chains, replace petrochemical inputs, innovate materials with enhanced performance, develop enzymes for breaking down harmful pollutants or cells and proteins optimized for capturing rare earth elements, or valorize waste streams into feedstocks for more valuable products.
Our customers in industrial biotech use our services to improve the manufacturing efficiency and cost of goods sold for their new and existing biotechnological products, innovate materials with enhanced performance, develop enzymes for breaking down harmful pollutants or cells and proteins optimized for capturing rare earth elements, or valorize waste streams into feedstocks for more valuable products.
The DNA and RNA code that underlies the biological world is what allows us to program it like computers, but it’s also what allows us to understand it at a molecular level and learn to predict how it’s going to behave in the world.
We need a fundamentally different approach to securing biology—one that starts with data. The genomic information that underlies the biological world is what allows us to program it like computers, and it’s what allows us to understand biology at a molecular level and learn to predict how it’s going to behave in the world.
In time, we believe computational approaches will reduce the need for certain kinds of experiments (for example, we already use machine learning to make protein and enzyme design projects more efficient). If computational approaches can replace certain sets of experiments, we expect to use the recovered Foundry capacity to work on ever-more complex cell programming challenges.
In time, we believe computational approaches will reduce the need for certain kinds of experiments (for example, we already use ML to make protein and enzyme design projects more efficient).
The FDA regulates the research, development, testing, quality control, import, export, safety, effectiveness, storage, recordkeeping, premarket review, approval or licensure, processing, formulation, manufacturing, packaging, labeling, advertising, promotion, marketing, distribution, sale, post-market monitoring and reporting of our customers’ pharmaceuticals, cosmetics and food products, and the FTC also regulates the advertising and promotion of these products.
The FDA regulates the research, development, testing, quality control, import, export, safety, effectiveness, storage, recordkeeping, premarket review, approval or licensure, processing, formulation, manufacturing, packaging, labeling, advertising, promotion, marketing, distribution, sale, post-market monitoring and reporting of our customers’ pharmaceutical, food and cosmetic products, and the FTC also regulates the advertising and promotion of these products. 18 Table of Contents We have acted as a systems integrator and authorized distributor of certain COVID-19 over-the counter diagnostic tests manufactured by independent third parties.
These trends are intertwined with geopolitical competition and destabilization, eroding buy-in and trust in institutions, and emerging technologies in both biotechnology and AI/ML, presenting a core security challenge for nations and the world.
And unfortunately, there are those who seek to use biology for nefarious purposes, misusing its incredible potential to cause harm. 8 Table of Contents These trends are intertwined with geopolitical competition and destabilization, eroding buy-in and trust in institutions, and emerging technologies in both biotechnology and AI/ML, presenting a core security challenge for nations and the world.
We must avoid a loss in trust in biotechnologies and the motivations of their developers that limits our ability to bring solutions to global challenges from protecting against pandemics to feeding the planet. And so we must chase, everyday, the development of capabilities and partnerships that can lead to value generation undergirded by sustained attention to the values they reflect.
We must avoid a loss in trust in biotechnologies and the motivations of their developers that limits our ability to bring solutions to global challenges 13 Table of Contents from protecting against pandemics to feeding the planet.
In addition, we hold CLIA Certificates of Waiver and may perform certain CLIA-waived tests on behalf of our clients, which subjects us to certain CLIA requirements. The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and criminal penalties.
The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and criminal penalties. The operations of our partner laboratories holding CLIA Certificates of Waiver are also subject to state and local laboratory regulation.
But as a platform we cannot anticipate and control all future uses of our technologies by our customers and those they work with. Far from abdicating responsibility, as a platform company we realize our power is to inspire and help enable others to carefully steward technologies with attention to their impacts over time.
Far from abdicating responsibility, we realize our power is to inspire and help enable others to carefully steward technologies with attention to their impacts over time.
Additionally, we negotiate a value share with our customers (typically in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform. As we add new programs, our portfolio of programs with this “downstream” value potential grows.
Second, as the key enabling technology for our customers’ products, we have historically negotiated a value share with our customers (in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.
We have several important attributes that contribute to our competitive advantage: • Ginkgo’s cell engineering platform, which allows countries to partner with us across biosecurity and bioeconomy needs (e.g., in Serbia), sets us up for future biosecurity partnerships with medical countermeasure developers across the biopharma industry who work with the Foundry already, and accelerates our technical development through access to proprietary Codebase and AI; • unique technological tools, like our ENDAR platform for engineering detection, that to our knowledge has no equivalent capabilities in the world; • a comprehensive offering that allows customers to come to a single platform for multimodal physical and digital surveillance and integrated global insights, rather than fragmented approaches; • a foundation of partnerships with 14 countries and key multilaterals such as Africa CDC, African Risk Capacity, and the International Livestock Research Institute; and • global leadership in the airport-based pathogen monitoring space.
We have several important attributes that contribute to our competitive advantage: • A comprehensive offering that allows customers to come to a single platform for multimodal physical and digital surveillance and integrated global insights, rather than fragmented approaches; • A suite of technical capabilities across epidemiological, bioinformatics, and scientific R&D; • Unique technological tools, like our ENDAR platform for engineering detection; • Our prominent role as a thought-leader and talent-attractor in this market; • A foundation of partnerships with countries across the globe and key multilaterals such as Africa CDC, African Risk Capacity, and the International Livestock Research Institute; and • Our global leadership in the airport-based pathogen monitoring space.
Who (or what infrastructure) will be affected? • Where did it emerge and how? Is there evidence of misuse and if so, what can we learn about the perpetrators? • What can I do about it? How effective will existing countermeasures be? Should we develop new countermeasures, and if so, what should they look like?
How likely is the biothreat to result in a major outbreak? o Where did a biothreat emerge and how? Is there evidence of misuse and if so, what can we learn about the perpetrators? o What can I do about a biothreat? How effective will existing countermeasures be?
We are not yet satisfied with these numbers and all teams have objectives around increasing diversity and building a culture of inclusion to ensure that diverse perspectives thrive. Laying the groundwork for strong employee engagement in the future As a founder-led company we have been able to infuse the organization with long-term strategic thinking from the start.
Laying the groundwork for strong employee engagement in the future As a founder-led company we have been able to infuse the organization with long-term strategic thinking from the start.
However, as a horizontal platform, we view these companies not as competitors but as potential customers and focus not on “beating” them but rather on demonstrating our value proposition. Verticalized cell engineering platforms Within certain end markets, Ginkgo may compete against vertically-focused biotechnology companies providing cell engineering R&D capabilities to customers within a narrow set of end markets.
Verticalized cell engineering platforms Within certain end markets, Ginkgo may compete against vertically-focused biotechnology companies providing cell engineering R&D capabilities to customers within a narrow set of end markets.
The FDA reviews the safety of food consumed by humans and of feed consumed by animals under the Federal Food, Drug and Cosmetic Act (“FDCA”). Under the FDCA, food and feed manufacturers are responsible for ensuring that the products they market, including those developed through genetic engineering, are safe and properly labeled.
Under the FDCA, food and feed manufacturers are responsible for ensuring that the products they market, including those developed through genetic engineering, are safe and properly labeled. In addition, the FDA must approve the use of any food additives, including GMOs, before marketing.
Trademarks and domain names Although our business is directed at sophisticated corporate customers rather than end consumers, we have trademark rights and registrations in our name, logo, and other brand indicia in the United States and other jurisdictions around the world. We also have registered domain names for websites that we use in our business, such as www.ginkgobioworks.com.
We require confidentiality and material transfer agreements from third parties that receive our confidential data or materials, and we also incorporate confidentiality and material transfer precautions into our collaboration agreements. 17 Table of Contents Trademarks and domain names Although our business is directed at sophisticated corporate customers rather than end consumers, we have trademark rights and registrations in our name, logo, and other brand indicia in the United States and other jurisdictions around the world.
Innovators in agricultural technology need to tap into biological diversity to develop new crop protection strategies to combat resistance and provide safer, low residue options for growers that meet consumer expectations and regulatory guidelines. They need to understand mode of action and improve the performance and stability of innovative biologicals for crop nutrition and crop protection.
Worldwide, agricultural innovation struggles due to long timelines, complex regulatory paths, and siloed data and capabilities. Innovators in agricultural technology tap into biological diversity to develop new crop protection strategies, to combat resistance, and to provide safer, low residue options for growers that meet consumer expectations and regulatory 4 Table of Contents guidelines.
Efficient use of AI is only possible with the use of massive amounts of data. Because of our access to large amounts of data, Ginkgo has the ability to build superior foundational models and from there, build fine-tuned models designed to cater to our customer needs.
Because of our access to large amounts of data, Ginkgo has the ability to build superior foundational models and from there, build fine-tuned models designed to cater to our customer needs, all powered by our partnership with Google Cloud. We are releasing a stream of these models on our Model API.
We will sometimes enter into long-term, strategic partnerships with innovative suppliers. Because of the significant scale of our Foundry’s operations, we believe we are often an early adopter and the largest customer at scale of certain new life science tools and technologies.
Because of the scale of our operations, we believe we are often an early adopter and the largest customer at scale of certain new life science tools and technologies. We will also occasionally acquire technology or Codebase assets for strategic reasons, including integration into our platform.
We have sought to bring together a diverse and multidisciplinary group of people who share our mission to make biology easier to engineer. Today, our extensive cross-functional team is collaborating to build our ecosystem, from organism designers to automation engineers, software developers the people team, business development to facilities management, finance to molecular biology.
Today, our extensive cross-functional team is collaborating to build our ecosystem, from organism designers to automation engineers, software developers to the people team, business development to facilities management, finance to molecular biology. A culture built on care We’ve strived to grow a culture based on care.
We grow as a platform precisely because we help create more value for our customers and the world than we capture. Our position serving customers across many industries provides strategic insights into what issues need collective attention to ensure future products can deliver meaningful solutions.
Our position serving customers across many industries provides strategic insights into what issues need collective attention to ensure future products can deliver meaningful solutions. But as a platform we cannot anticipate and control all future uses of our technologies by our customers and those they work with.
The operations of our partner laboratories and our laboratories holding CLIA Certificates of Waiver are also subject to state and local laboratory regulation. CLIA provides that a state may adopt laboratory regulations different from or more stringent than those under federal law, and a number of states have implemented their own laboratory regulatory requirements.
CLIA provides that a state may adopt laboratory regulations different from or more stringent than those under federal law, and a number of states have implemented their own laboratory regulatory requirements. State laws may require that laboratory personnel meet certain qualifications, specify certain quality controls, or require maintenance of certain records.
Because these acquisitions more than doubled the size of our patent portfolio, and because the strategic priorities of the companies we acquired often differed from Ginkgo’s priorities, we may decide that it is in our interest to abandon, sell, or otherwise dispose of certain patents or patent applications from these acquisitions or that we determine are no longer relevant to our business.
We may decide that it is in our interest to abandon, sell, or otherwise dispose of certain patents or patent applications that we determine are no longer relevant to our business. Patents generally have a term of twenty years from the date they are filed.
Ginkgo is also investing in building our BIOINT offering and wraparound technical assistance services in 2024, in consultation with our existing network and additional public and private partners, as we think it has the potential to significantly drive revenue in the future.
Ginkgo is also investing in building our Horizon product, in consultation with our existing network and additional public and private partners, as we think it has the potential to significantly drive revenue in the future. Our revenue flows are becoming more recurring as we increasingly incorporate longer-term contracts with recurring monthly fee models for Canopy program services, data, and analytics.
The long-term engagement and mentality of our employees can be seen in our turnover: voluntary attrition is well below the industry average. The individuals who work at Ginkgo and build our platform care deeply about how that platform is used and the impact our company will have in the world.
We have emerged from the restructuring with a strengthened focus on the long-term performance and sustainability of our business. The individuals who work at Ginkgo and build our platform care deeply about how that platform is used and the impact our company will have in the world.

… 362 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

159 edited+35 added−35 removed430 unchanged
Biggest changeProceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business and could be unsuccessful. 46 Table of Contents Reductions in the scope or enforceability of our patent protection may adversely affect our customers’ ability to commercialize their products and may thus reduce our downstream value from royalties, equity, or commercial milestone payments.
Biggest changeReductions in the scope or enforceability of our patent protection may adversely affect our customers’ ability to commercialize their products and may thus reduce our downstream value from royalties, commercial milestone payments and/or equity. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.
We may not be able to integrate acquired technologies, assets, products, operations or businesses successfully, make any acquired businesses profitable, retain key employees (or integrate employees) or realize anticipated revenues, cost savings, or synergies, if any, from these acquisitions, or do so in an effective, timely and non-disruptive manner, which could adversely affect our business and financial condition.
We may not be able to successfully integrate acquired technologies, assets, products, operations or businesses , make acquired businesses profitable, retain key employees (or integrate employees) or realize anticipated revenues, cost savings, or synergies, if any, from these acquisitions, or do so in an effective, timely and non-disruptive manner, which could adversely affect our business and financial condition.
Partnering with and investing in early stage and small companies may expose us to a number of risks, including that early stage and small companies may have: • shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render small companies more vulnerable to competitors’ actions and market conditions, as well as general economic downturns; • more limited access to capital and higher funding costs, may be in a weaker financial position and may need more capital than originally anticipated to expand, compete and operate their business; • the inability to obtain financing from the public capital markets or other traditional sources, such as commercial banks, in part because loans made to these types of companies entail higher risks than loans made to companies that have larger businesses, greater financial resources or are otherwise able to access traditional credit sources on more attractive terms; • a higher likelihood of holding cash deposits or maintaining lines of credit with banks focused on providing banking services to early stage or venture-backed companies, such as Silicon Valley Bank (“SVB”), which failed in March 2023; • a higher likelihood of depending on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on such company and, in turn, on us; • less predictable operating results, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; • particular vulnerabilities to changes in customer preferences and market conditions, depend on a limited number of customers, and face intense competition, including from companies with greater financial, technical, managerial and marketing resources; and • fewer administrative resources, which can lead to greater uncertainty in their ability to generate accurate and reliable financial data, including their ability to deliver audited financial statements.
Partnering with and investing in early stage and small companies may expose us to a number of risks, including that early stage and small companies may have: 25 Table of Contents ● shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render small companies more vulnerable to competitors’ actions and market conditions, as well as general economic downturns; ● more limited access to capital and higher funding costs, may be in a weaker financial position and may need more capital than originally anticipated to expand, compete and operate their business; ● the inability to obtain financing from the public capital markets or other traditional sources, such as commercial banks, in part because loans made to these types of companies entail higher risks than loans made to companies that have larger businesses, greater financial resources or are otherwise able to access traditional credit sources on more attractive terms; ● a higher likelihood of holding cash deposits or maintaining lines of credit with banks focused on providing banking services to early stage or venture-backed companies, such as Silicon Valley Bank (“SVB”), which failed in March 2023; ● a higher likelihood of depending on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on such company and, in turn, on us; ● less predictable operating results, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position; ● particular vulnerabilities to changes in customer preferences and market conditions, depend on a limited number of customers, and face intense competition, including from companies with greater financial, technical, managerial and marketing resources; and ● fewer administrative resources, which can lead to greater uncertainty in their ability to generate accurate and reliable financial data, including their ability to deliver audited financial statements.
Our long-term objective is to generate free cash flow from the commercialization of programs by customers across a variety of industries, as well as from our biosecurity-focused offerings. Our estimated costs and timelines for the completion of programs are based on our experiences to date and our expectations for each stage of the program in development.
Our long-term objective is to generate free cash flow from the commercialization of programs for customers across a variety of industries, as well as from our biosecurity-focused offerings. Our estimated costs and timelines for the completion of programs are based on our experiences to date and our expectations for each stage of the program in development.
In the future, we may also own equity interests in other companies. The process by which we receive equity interests and the factors we consider in deciding whether to accept, hold or dispose of these equity positions may differ significantly from those that an independent investor would evaluate when considering equity interests in a company.
In the future, we may also own equity interests in other companies. The process and timing by which we receive equity interests and the factors we consider in deciding whether to accept, hold or dispose of these equity positions may differ significantly from those that an independent investor would evaluate when considering equity interests in a company.
We compete for qualified technical personnel with other life sciences and information technology companies, as well as academic institutions and research institutions in the markets in which we operate, including: Massachusetts, USA; California, USA; The Netherlands; France; and Switzerland. In addition, as we add international operations, we will increasingly need to recruit qualified personnel outside the United States.
We compete for qualified technical personnel with other life sciences and information technology companies, as well as academic institutions and research institutions in the markets in which we operate, including: Massachusetts, USA; California, USA; The Netherlands; and Switzerland. In addition, as we add international operations, we will increasingly need to recruit qualified personnel outside the United States.
Such volatility may be, in part, attributable to: • future sales of our common stock or other securities by us or our existing stockholders, or the perception of such future sales; • results of operations of the company or our competitors that vary from the expectations of securities analysts and investors; • changes in expectations as to our future financial performance and growth, including assessments of our business, prospects, financial estimates and investment recommendations by securities analysts, investors and short sellers; • additions or departures of key management personnel or members of our board of directors; • announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; • announcements relating to actual or potential civil and non-civil litigation, as well as governmental or regulatory investigations or inquiries; • guidance that we provide to the public, any changes in this guidance or our failure to meet this guidance; • changes in the perception of our offerings or the synthetic biology industry more general including changes in regulatory conditions; • the development and sustainability of an active trading market for our common stock; • changes in accounting principles; • changes in general economic or market conditions or trends in our industry or markets; • other events or factors, including those resulting from natural disasters, pandemics, epidemics, war, acts of terrorism or responses to these events.
Such volatility may be, in part, attributable to: 57 Table of Contents ● future sales of our common stock or other securities by us or our existing stockholders, or the perception of such future sales; ● results of operations of the company or our competitors that vary from the expectations of securities analysts and investors; ● changes in expectations as to our future financial performance and growth, including assessments of our business, prospects, financial estimates and investment recommendations by securities analysts, investors and short sellers; ● additions or departures of key management personnel or members of our board of directors; ● announcements by us or our competitors of significant contracts, new products, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments; ● announcements relating to actual or potential civil and non-civil litigation, as well as governmental or regulatory investigations or inquiries; ● guidance that we provide to the public, any changes in this guidance or our failure to meet this guidance; ● changes in the perception of our offerings or the synthetic biology industry more general including changes in regulatory conditions; ● the development and sustainability of an active trading market for our common stock; ● changes in accounting principles; ● changes in general economic or market conditions or trends in our industry or markets; ● other events or factors, including those resulting from natural disasters, pandemics, epidemics, war, acts of terrorism or responses to these events.
Misconduct by these parties could include intentional, reckless and/or 60 Table of Contents negligent conduct or disclosure of unauthorized activities to us that causes us to breach our contracts and/or violates applicable laws and regulations, including but not limited to laws: • applicable to the provision of health care services; • governing the storage and handling of controlled substances; • requiring the reporting of true, complete and accurate information to the FDA, USDA, and other government agencies; • specifying vendor qualification standards and recordkeeping requirements; • international, federal and state fraud and abuse laws and regulations; • protecting the privacy and security of personally identifiable information and requiring breach notification; • relating to anti-corruption, anti-bribery, and anti-money laundering; and • requiring the true, complete and accurate reporting of services, financial information, or data.
Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that causes us to breach our contracts and/or violates applicable laws and regulations, including but not limited to laws: ● applicable to the provision of health care services; ● governing the storage and handling of controlled substances; ● requiring the reporting of true, complete and accurate information to the FDA, USDA, and other government agencies; ● specifying vendor qualification standards and recordkeeping requirements; 51 Table of Contents ● international, federal and state fraud and abuse laws and regulations; ● protecting the privacy and security of personally identifiable information and requiring breach notification; ● relating to anti-corruption, anti-bribery, and anti-money laundering; and ● requiring the true, complete and accurate reporting of services, financial information, or data.
Additionally, we may sell our equity interests in certain subsidiaries or collaborations but most of these equity stakes are in private companies and we may not be able to find a buyer due to contractual restrictions or otherwise, or may incur significant impairment if we sell these positions for liquidity.
Additionally, we may wish to sell our equity interests in certain subsidiaries or collaborations but most of these equity stakes are in private companies and we may not be able to find a buyer due to contractual restrictions or otherwise, or may incur significant impairment if we sell these positions for liquidity.
Owning equity increases our exposure to the risks of the other company and, in the case of customers, beyond the products of our collaborations. Our equity ownership positions expose us to market volatility and the potential for negative returns. We may have restrictions on resale or limited markets to sell our equity ownership.
Owning equity interests increases our exposure to the risks of the other company and, in the case of customers, beyond the products of our collaborations. Our equity ownership positions expose us to market volatility and the potential for negative returns. We may have restrictions on resale or limited markets to sell our equity ownership.
In addition, the market for qualified personnel is very competitive because of (a) the limited number of people available who have the necessary technical skills and understanding of our technology and products and (b) the nature of our industry which requires certain of our technical personnel to be on-site in our facilities.
In addition, the market for qualified personnel is competitive because of (a) the limited number of people available who have the necessary technical skills and understanding of our technology and products and (b) the nature of our industry which requires certain of our technical personnel to be on-site in our facilities.
We cannot provide assurances that there will not be additional material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, or results of operations.
We cannot provide assurances that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, or results of operations.
The laws of some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States or may apply different rules concerning the assignment of intellectual property rights. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
The laws of some countries do not protect intellectual property rights to the same extent as do the laws of the United States or may apply different rules concerning the assignment of intellectual property rights. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain jurisdictions.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) enacted as part of the American Recovery and Reinvestment Act of 2009, and its implementing regulations, and as amended again by the Modifications to the HIPAA Privacy, Security, Enforcement and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules, commonly referred to as the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers), as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information, to safeguard the privacy, security and transmission of individually identifiable health information from any unauthorized use or disclosure; • the U.S.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) enacted as part of the American Recovery and Reinvestment Act of 2009, and its implementing regulations, and as amended again by the Modifications to the HIPAA Privacy, Security, Enforcement and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules, commonly referred to as the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers), as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health 47 Table of Contents information, to safeguard the privacy, security and transmission of individually identifiable health information from any unauthorized use or disclosure; ● the U.S.
If we fail to maintain a position of strength in any of these factors, our ability to deliver on customer programs, sign new customer collaborations, and/or launch new programs with existing customers may suffer and this could adversely affect our prospects.
If we fail to maintain a position of strength in any of these factors, our ability to deliver on customer programs, sign new customer programs, and/or launch new programs with existing customers may suffer and this could adversely affect our prospects.
We may be unable to complete future strategic acquisitions or successfully integrate strategic acquisitions which could adversely affect our business and financial condition. Our inability to complete any future strategic acquisitions or to successfully integrate any new or previous strategic acquisitions could have a material adverse effect on our business.
We may be unable to complete future strategic acquisitions or successfully integrate strategic acquisitions which could adversely affect our business and financial condition. Our inability to complete any future strategic acquisitions or to successfully integrate any new strategic acquisitions could have a material adverse effect on our business.
If our operations are found to be in violation of any federal or state laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to claims and proceedings by private parties, investigations and other proceedings by governmental authorities, as well as penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws or regulations, imprisonment for 57 Table of Contents individuals and exclusion from participation in government programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm.
If our operations are found to be in violation of any federal or state laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to claims and proceedings by private parties, investigations and other proceedings by governmental authorities, as well as penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of noncompliance with these laws or regulations, imprisonment for individuals and exclusion from participation in government programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm.
The 56 Table of Contents Stark Law also prohibits the entity furnishing the designated health services from billing, presenting or causing to be presented a claim for the designated health services furnished pursuant to the prohibited referral; • the federal civil false claims laws, including without limitation the federal False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment of government funds, or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
The Stark Law also prohibits the entity furnishing the designated health services from billing, presenting or causing to be presented a claim for the designated health services furnished pursuant to the prohibited referral; ● the federal civil false claims laws, including without limitation the federal False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment of government funds, or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
While we have developed systems and processes designed to protect the integrity, confidentiality and security of the confidential and personal information under our control, we cannot guarantee that any security measures that we or our third-party service providers implement will be effective in preventing security breaches and incidents, cyberattacks or similar events such as viruses and worms, phishing attacks and other forms of social engineering, denial-of-service attacks, ransomware attacks, physical or electronic break-ins, third-party or employee theft or misuse, and other negligent actions, errors or malfeasance by employees or other third parties, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations.
While we have developed systems and processes designed to protect the integrity, confidentiality and security of the confidential and personal information under our control, we cannot guarantee that any security measures that we or our third-party service providers implement will be effective in preventing security breaches and incidents, cyberattacks or similar events such as viruses and worms, phishing attacks and other forms of social engineering, denial-of- 54 Table of Contents service attacks, ransomware attacks, physical or electronic break-ins, third-party or employee theft or misuse, and other negligent actions, errors or malfeasance by employees or other third parties, and similar disruptions from unauthorized tampering with our servers and computer systems or those of third parties that we use in our operations.
Bribery Act, and similar laws in other jurisdictions; • multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, tariffs, trade regulations, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; 40 Table of Contents • failure by us, our collaborators or our customers to obtain regulatory clearance, authorization or approval for the use of our services in various countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property; • difficulties in staffing and managing foreign operations, including difficulties related to the increased operations, travel, infrastructure and legal compliance costs associated with international locations; • logistics and regulations associated with shipping chemicals, biomaterials and product samples, including infrastructure conditions and transportation delays; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, widespread inflationary pressure, the impact of local and regional financial crises, on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; • natural disasters, political and economic instability, including wars, terrorism and political unrest, the outbreak of disease, or public health epidemics/pandemics, such as COVID-19, which could have an adverse impact on our employees, contractors, customers, partners, travel and the global economy; • breakdowns in infrastructure, utilities and other services; • boycotts, curtailment of trade and other business restrictions; and • the other risks and uncertainties described in this Annual Report.
Bribery Act, and similar laws in other jurisdictions; ● multiple, conflicting and changing laws and regulations such as privacy, security and data use regulations, tax laws, tariffs, including tariffs announced by the Trump administration in 2025, trade regulations, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; ● failure by us, our collaborators or our customers to obtain regulatory clearance, authorization or approval for the use of our services in various countries; ● additional potentially relevant third-party patent rights; ● complexities and difficulties in obtaining intellectual property protection and enforcing our intellectual property; ● difficulties in staffing and managing foreign operations, including difficulties related to the increased operations, travel, infrastructure and legal compliance costs associated with international locations; 30 Table of Contents ● logistics and regulations associated with shipping chemicals, biomaterials and product samples, including infrastructure conditions and transportation delays; ● financial risks, such as longer payment cycles, difficulty collecting accounts receivable, widespread inflationary pressure, the impact of local and regional financial crises, on demand and payment for our products and exposure to foreign currency exchange rate fluctuations; ● natural disasters, political and economic instability, including wars, terrorism and political unrest, the outbreak of disease, or public health epidemics/pandemics, such as COVID-19, which could have an adverse impact on our employees, contractors, customers, partners, travel and the global economy; ● breakdowns in infrastructure, utilities and other services; ● boycotts, curtailment of trade and other business restrictions; and ● the other risks and uncertainties described in this Annual Report.
Accordingly, although there can be no assurance that we will undertake or successfully complete any future acquisitions, any transactions that we have completed or in the future do complete may not yield the anticipated benefits and may be subject to the foregoing or other risks and have a material and adverse effect on our business, financial condition, results of operations, and prospects.
Accordingly, although there can be no assurance that we will undertake or successfully complete any future acquisitions, any transaction that we have completed, or in the future do complete, may not yield the anticipated benefits and may be subject to the foregoing or other risks and have a material and adverse effect on our business, financial condition, results of operations, and prospects.
For example, the White House and World Health Organization have each announced the end of the public health emergency effective May 2023; therefore, the revenue stream of our COVID-19 school testing services ended in the third quarter of 2023. As a result, our Biosecurity business is now focusing on global surveillance programs and analytic services.
For example, the White House and World Health Organization each announced the end of the public health emergency effective May 2023 and the revenue stream of our COVID-19 school testing services ended in the third quarter of 2023. As a result, our Biosecurity business is now focusing on global surveillance programs and analytic services.
New laws, regulations and judicial decisions, or new interpretations of existing laws, regulations and decisions, may also limit our potential revenues, and we may need to revise our R&D or commercialization programs. The costs of defending claims associated with violations, as well as any sanctions imposed, could significantly adversely affect our financial performance.
Additionally, new laws, regulations and judicial decisions, or new interpretations of existing laws, regulations and decisions, may limit potential revenues, and we may need to revise our R&D or commercialization programs. The costs of defending claims associated with violations, as well as any sanctions imposed, could significantly adversely affect our financial performance.
Even if we identify suitable opportunities, including pending transactions, we may not be able to complete such acquisitions on favorable terms or at all, which could damage our business. Additionally, pursuing acquisitions, whether successful or unsuccessful, could result in civil litigation and regulatory penalties.
Even if we identify suitable opportunities, including pending transactions, we may not be able to complete such acquisitions on favorable terms or at all, which could damage our business. Additionally, pursuing acquisitions or other strategic transactions, whether successful or unsuccessful, could result in civil litigation and regulatory penalties.
Because the Class C common stock carries no voting rights (except as otherwise expressly provided in the Charter or required by applicable law), is not convertible into any other capital stock, and is not listed for trading on an exchange or registered for sale with the SEC, shares of Class C common stock may be less liquid and less attractive to any future recipients of these shares than shares of Class A common stock, although we may seek to list the Class C common stock for trading and register shares of Class C common stock for sale in the future.
Because the Class C common stock carries no voting rights (except as otherwise expressly provided in the Charter or required by applicable law), is not convertible into any other capital stock, and is not listed for trading on an exchange or registered for sale with the SEC, shares of Class C common stock may be less liquid and less attractive to any future recipients of these shares than shares of Class A common stock, although we may seek to list the Class C common stock 59 Table of Contents for trading and register shares of Class C common stock for sale in the future.
As a result, in addition to reducing our revenue or delaying the development of our programs, the loss of one or more of our customer relationships or the failure to add new customers or programs may hinder our accumulation of such information, thus hindering our efforts to advance our technological differentiation and improve our platform.
As a result, in addition to reducing our revenue or delaying the delivery of our programs, the loss of one or more of our customer relationships or the failure to add new customers or programs may hinder our accumulation of such information, thus hindering our efforts to advance our technological differentiation and improve our platform.
While we monitor our use of open-source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open-source agreement, we cannot guarantee that we will be successful, that all open-source software is reviewed prior to use in our platform, that our developers have not incorporated open- source software into our products that we are unaware of or that they will not do so in the future.
While we monitor our use of open-source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of an open-source agreement, we 41 Table of Contents cannot guarantee that we will be successful, that all open-source software is reviewed prior to use in our platform, that our developers have not incorporated open- source software into our products that we are unaware of or that they will not do so in the future.
Any failure, or perceived failure, by us to comply with any federal, state, local or international laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others or other liabilities 55 Table of Contents or require us to change our operations.
Any failure, or perceived failure, by us to comply with any federal, state, local or international laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations could adversely affect our reputation, brand and business, and may result in claims, proceedings or actions against us by governmental entities or others or other liabilities or require us to change our operations.
Because holders of Class C common stock have no voting rights (except as otherwise expressly provided in the Charter or required 66 Table of Contents by applicable law), the holders of Class B common stock may be able to significantly influence the outcome of matters submitted to our stockholders for approval for a longer period of time than would be the case if we issued Class A common stock rather than Class C common stock in such transactions.
Because holders of Class C common stock have no voting rights (except as otherwise expressly provided in the Charter or required by applicable law), the holders of Class B common stock may be able to significantly influence the outcome of matters submitted to our stockholders for approval for a longer period of time than would be the case if we issued Class A common stock rather than Class C common stock in such transactions.
If any third-party manufacturers or laboratories offering tests that we use in our testing services are deemed by the FDA or other regulatory authorities to have violated applicable law or if the tests or test components are marketed, processed or distributed in violation of applicable law, we may be subject to enforcement 58 Table of Contents action or litigation, or we may be required to find alternative tests to support our testing services, which could increase our costs.
If any third-party manufacturers or laboratories offering tests that we use in our testing services are deemed by the FDA or other regulatory authorities to have violated applicable law or if the tests or test components are marketed, processed or distributed in violation of applicable law, we may be subject to enforcement action or litigation, or we may be required to find alternative tests to support our testing services, which could increase our costs.
Challenges inherent to the use of AI or specific to Google's AI systems could adversely impact the reliability of our data and subject us to delays and competitive harm, result in new or enhanced 41 Table of Contents governmental or regulatory scrutiny, pose confidentiality or security risks, ethical concerns, or legal liability, as well as brand or reputational harm, and our business and results of operations may suffer.
Challenges inherent to the use of AI generally or specific to Google's AI systems could adversely impact the reliability of our data and subject us to delays and competitive harm, result in new or enhanced governmental or regulatory scrutiny, 31 Table of Contents pose confidentiality or security risks, ethical concerns, or legal liability, as well as brand or reputational harm, and our business and results of operations may suffer.
Additionally, in the process of developing programs, we generate Foundry know-how and accumulate meaningful biological and data assets, including optimized proteins and organisms, characterized genetic parts, enhanced understanding of metabolic pathways, biological, chemical, and genetic libraries, and other elements of biological data.
Additionally, in the process of delivering programs, we generate Foundry know-how and accumulate meaningful biological and data assets, including optimized proteins and organisms, characterized genetic parts, enhanced understanding of metabolic pathways, biological, chemical, and genetic libraries, and other elements of biological data.
Although we enter into confidentiality agreements with parties who have access to confidential or patentable aspects of our R&D output, such as our employees, collaborators, consultants, advisors and other third parties, any of these 45 Table of Contents parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.
Although we enter into confidentiality agreements with parties who have access to confidential or patentable aspects of our R&D output, such as our employees, collaborators, consultants, advisors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection.
There are no assurances, however, that any strategic acquisition opportunities will arise or, if they do, that they will be consummated. Certain acquisitions may be difficult to complete for a number of 36 Table of Contents reasons, including the need to satisfy customary closing conditions, the need for antitrust and/or other regulatory approvals, as well as disputes or litigation.
There are no assurances, however, that any strategic acquisition opportunities will arise or, if they do, that they will be consummated. Certain acquisitions may be difficult to complete for a number of reasons, including the need to satisfy customary closing conditions, the need for antitrust and/or other regulatory approvals, as well as disputes or litigation.
We engage in conversations with companies regarding potential customer collaborations on an ongoing basis. We may spend considerable time and money engaging in these conversations and feasibility assessments, including understanding the technical approach to a program, customer concerns and limitations, and legal or regulatory landscape of a potential program or offering, which may not result in a commercial agreement.
We engage in conversations with companies regarding potential customer relationships on an ongoing basis. We may spend considerable time and money engaging in these conversations and feasibility assessments, including understanding the technical approach, customer concerns and limitations, and legal or regulatory landscape of a potential program or offering, which may not result in a commercial agreement.
This limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the election of directors, the approval of certain employee compensation plans, the adoption of certain amendments to our organizational documents and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
This limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the election of directors, the approval of certain employee compensation plans, the 56 Table of Contents adoption of certain amendments to our organizational documents and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
We have experienced shortages in some of our key equipment and supplies, including those required in our labs, as well as disruptions in services provided by third parties, and may do so in the future as a result of supply chain issues tied to global pandemics, conflicts, or otherwise.
We have experienced shortages in some of our key equipment and supplies, including those required in our labs, as well as disruptions in services provided by third parties, and may do so in the future as a result of supply chain issues tied to global 27 Table of Contents pandemics, conflicts, or otherwise.
These changes in the law have created uncertainty with respect to the validity and enforceability of patents covering natural and engineered sequences. Further, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad.
These changes in the law have created uncertainty with respect to the validity and enforceability of patents covering natural and engineered sequences. 36 Table of Contents Further, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent offices in the United States and abroad.
We may be subject to claims challenging the inventorship or ownership of our patents, biomaterials and other intellectual property. Certain of our employees, consultants and contractors were previously employed at universities or other software or biotechnology companies, including our competitors or potential competitors. Additionally, some of our consultants or 47 Table of Contents contractors may have ongoing relationships with universities.
We may be subject to claims challenging the inventorship or ownership of our patents, biomaterials and other intellectual property. Certain of our employees, consultants and contractors were previously employed at universities or other software or biotechnology companies, including our competitors or potential competitors. Additionally, some of our consultants or contractors may have ongoing relationships with universities.
For these reasons, we may not be able to utilize a material portion of our net operating loss carryforwards and other tax attributes even if we attain profitability. We have identified a material weakness in our internal controls over financial reporting, and we may identify additional material weaknesses in the future.
For these reasons, we may not be able to utilize a material portion of our net operating loss carryforwards and other tax attributes even if we attain profitability. We had in the past identified a material weakness in our internal controls over financial reporting, and we may identify additional material weaknesses in the future.
Even when HIPAA or a state law does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair and/or deceptive acts or 59 Table of Contents practices in violation of Section 5(a) of the FTC Act.
Even when HIPAA or a state law does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair and/or deceptive acts or practices in violation of Section 5(a) of the FTC Act.
Moreover, the World Intellectual Property Organization is considering requiring disclosures in patents of the origin of genetic resources, which may further increase uncertainty and the cost of patent prosecution. These changes could increase our R&D costs and adversely affect our business, financial condition, and results.
Moreover, the World Intellectual Property Organization is considering requiring disclosures in patents of the origin of genetic resources, which may further increase uncertainty and the cost of patent 39 Table of Contents prosecution. These changes could increase our R&D costs and adversely affect our business, financial condition, and results.
There is also a risk that regulatory changes, such as suspensions on the use of net operating losses or other unforeseen reasons, may result in our existing net operating loss carryforwards expiring or otherwise becoming unavailable to offset future taxable income.
There is also a risk that regulatory changes, such as suspensions on the use of net operating losses or other unforeseen reasons, may result in our existing net operating loss carryforwards expiring or otherwise becoming unavailable 44 Table of Contents to offset future taxable income.
In connection with the SRNG Business Combination, in September 2021, Jason Kelly, Reshma Shetty, Austin Che and Bartholomew Canton were granted restricted stock units, which vested, along with certain related earnout shares that achieved the $12.50 price threshold, on October 1, 2022.
In connection with the SRNG Business Combination, in September 2021, Jason Kelly, Reshma Shetty, Austin Che and Bartholomew Canton were granted restricted stock units, which vested, along with certain related earnout shares that achieved the $500 price threshold, on October 1, 2022.
We must continue to secure and maintain sufficient and stable supplies of laboratory reagents, consumables, equipment, and laboratory services. We depend on a limited number of suppliers, some of which are single-source 37 Table of Contents suppliers, and contract manufacturers for critical supplies, equipment, and services for research, development, and manufacturing of our products and processes.
We must continue to secure and maintain sufficient and stable supplies of laboratory reagents, consumables, equipment, and laboratory services. We depend on a limited number of suppliers, some of which are single-source suppliers, and contract manufacturers for critical supplies, equipment, and services for research, development, and manufacturing of our products and processes.
In addition, the U.S. government may acquire title in any country in which a 48 Table of Contents patent application is not filed. Certain technology and inventions are also subject to transfer restrictions during the term of these agreements with the U.S. government and for a period thereafter.
In addition, the U.S. government may acquire title in any country in which a patent application is not filed. Certain technology and inventions are also subject to transfer restrictions during the term of these agreements with the U.S. government and for a period thereafter.
Moreover, if the perceived value of our equity awards declines, it may adversely affect our ability to attract and retain key employees. If we do not maintain the necessary personnel to accomplish our business objectives, we may experience staffing constraints that adversely affect our ability to support our programs and operations.
Moreover, if the perceived value of our equity awards declines, it may adversely affect our ability to attract and retain key employees. If we 42 Table of Contents do not maintain the necessary personnel to accomplish our business objectives, we may experience staffing constraints that adversely affect our ability to support our programs and operations.
In such a case, we might be restricted or excluded from using that intellectual property even if we had developed it before our competitor did. Our facilities hold large collections of microbial strains, cell lines and other biomaterials.
In such a case, we might be restricted or excluded from using that intellectual property even if we had developed it before our competitor did. 37 Table of Contents Our facilities hold large collections of microbial strains, cell lines and other biomaterials.
We cannot be certain that our vendors, suppliers, and licensors are not infringing upon the 50 Table of Contents intellectual property rights of others or that they have sufficient rights to the third-party technology used in our business in all jurisdictions in which we may operate.
We cannot be certain that our vendors, suppliers, and licensors are not infringing upon the intellectual property rights of others or that they have sufficient rights to the third-party technology used in our business in all jurisdictions in which we may operate.
We maintain product liability insurance, but this insurance may not fully protect us from the financial impact of defending against product liability claims. Any product liability claim brought against us, with or without merit, could increase our 65 Table of Contents insurance rates or prevent us from securing insurance coverage in the future.
We maintain product liability insurance, but this insurance may not fully protect us from the financial impact of defending against product liability claims. Any product liability claim brought against us, with or without merit, could increase our insurance rates or prevent us from securing insurance coverage in the future.
As of December 31, 2023, our directors and executive officers hold in the aggregate almost half of the total voting power of our outstanding capital stock, and our directors, founders and executive officers hold in the aggregate more than half of the total voting power of our outstanding capital stock.
As of December 31, 2024, our directors and executive officers hold in the aggregate almost half of the total voting power of our outstanding capital stock, and our directors, founders and executive officers hold in the aggregate more than half of the total voting power of our outstanding capital stock.
We have derived a significant portion of our revenues from fees and milestone 32 Table of Contents payments from technical development services provided to customers to advance programs, as well as a significant portion of our revenues from Biosecurity. Historically, these fees have not been sufficient to cover the full cost of our operations.
We have derived a significant portion of our revenues from fees and milestone payments from technical development services provided to customers to advance programs, as well as a significant portion of our revenues from Biosecurity. Historically, these fees have not been sufficient to cover the full cost of our operations.
There can be no assurances that we would prevail in any suit brought by us or against us by third parties, or successfully settle or otherwise resolve those claims. Significant litigation would have substantial costs, even if the eventual outcome were favorable to us, and would divert management’s attention from our business objectives.
There can be no assurances that we would prevail in any suit brought by us or against us by third parties, or successfully settle or 38 Table of Contents otherwise resolve those claims. Significant litigation would have substantial costs, even if the eventual outcome were favorable to us, and would divert management’s attention from our business objectives.
Certain of such shares have been sold into the market, and any future sales could harm the prevailing market price of our securities. 67 Table of Contents We have also issued shares of our common stock in connection with certain of our acquisitions, which issuances dilute our existing shareholders.
Certain of such shares have been sold into the market, and any future sales could harm the prevailing market price of our securities. We have also issued shares of our common stock in connection with certain of our acquisitions, which issuances dilute our existing shareholders.
However, net operating loss carryforwards generated prior to January 1, 2018 are subject to expiration for U.S. federal income tax purposes. As of December 31, 2023, we had federal net operating loss carryforwards of approximately $1.0 billion, of which $139.2 million will begin to expire in 2029 and $884.1 million can be carried forward indefinitely.
However, net operating loss carryforwards generated prior to January 1, 2018 are subject to expiration for U.S. federal income tax purposes. As of December 31, 2024, we had federal net operating loss carryforwards of approximately $1.2 billion, of which $139.2 million will begin to expire in 2029 and $1.1 billion can be carried forward indefinitely.
Such issuances could constitute a material portion of our then-outstanding shares of common stock and may reduce the percentage ownership of our existing stockholders. Acquisitions may also increase our expenses and reduce our cash available for operations and other uses.
Such issuances could constitute a material portion of our then-outstanding shares of common stock and may reduce the percentage ownership of our existing stockholders. Acquisitions or other strategic transactions may also increase our expenses and reduce our cash available for operations and other uses.
Further, our agreements with some of our customers, suppliers or other entities require us to defend or indemnify these parties if they become involved in infringement claims that target our products, services or technologies, or in certain other situations.
Further, our agreements with some of our customers, suppliers or other entities require us to defend or indemnify these parties if they become involved in infringement claims that target our products, services or technologies, or in certain other 40 Table of Contents situations.
Our decisions and actions in pursuit of long-term success and long-term stockholder value, which may include our multi-class stock structure, making investments in R&D and our employees, and investing in and introducing new products and services, may not result in the long-term benefits that we expect, in which case our business, results of operations and financial condition, as well as the trading price of our Class A common stock, could be materially adversely affected.
Our decisions and actions in pursuit of long-term success and long-term stockholder value, which may include our multi-class stock structure, making investments in R&D and our employees, and investing in and introducing new products and services, may not result in the long-term benefits that we expect, in which case our business, results of operations and financial condition, as well as the trading price of our Class A common stock, could be materially adversely affected. 60 Table of Contents Item 1B.
Because the services we provide in our laboratories are critical to many of our customers’ businesses, service interruptions or significant equipment damage in our laboratories could also result in lost revenue or other indirect or consequential damages to our customers.
Because the services we provide in our laboratories are critical to many of our customers’ businesses, service interruptions or significant equipment damage in our laboratories could also 43 Table of Contents result in lost revenue or other indirect or consequential damages to our customers.
Data and know-how generated from our programs provide the basis for expanded capabilities that we believe further supports our customer collaborations.
Data and know-how generated from our programs provide the basis for expanded capabilities that we believe further supports our customer relationships.
Our dependence on these single-source and preferred suppliers exposes us to certain risks, including the following: • our suppliers may cease or reduce production or deliveries, raise prices, or renegotiate terms; • we may be unable to locate a suitable replacement on acceptable terms or on a timely basis, if at all; • if there is a disruption to our single-source or preferred suppliers’ operations, and if we are unable to enter into arrangements with alternative suppliers, we will have no other means of continuing the relevant research, development, or manufacturing operations until they restore the affected facilities or we or they procure alternative sources of supply; • delays caused by supply issues may harm our reputation, frustrate our customers, and cause them to turn to our competitors for future programs; and • our ability to progress the development of existing programs and the expansion of our capacity to begin future programs could be materially and adversely impacted if the single-source or preferred suppliers upon which we rely were to experience a significant business challenge, disruption, or failure due to issues such as financial difficulties or bankruptcy, issues relating to other customers such as regulatory or quality compliance issues, or other financial, legal, regulatory, or reputational issues. 38 Table of Contents Moreover, to meet anticipated market demand, our suppliers may need to increase manufacturing capacity, which could involve significant challenges.
Our dependence on these single-source and preferred suppliers exposes us to certain risks, including the following: ● our suppliers may cease or reduce production or deliveries, raise prices, or renegotiate terms; ● we may be unable to locate a suitable replacement on acceptable terms or on a timely basis, if at all; ● if there is a disruption to our single-source or preferred suppliers’ operations, and if we are unable to enter into arrangements with alternative suppliers, we will have no other means of continuing the relevant research, development, or manufacturing operations until they restore the affected facilities or we or they procure alternative sources of supply; ● delays caused by supply issues may harm our reputation, frustrate our customers, and cause them to turn to our competitors for future programs; and ● our ability to progress the development of existing programs and the expansion of our capacity to begin future programs could be materially and adversely impacted if the single-source or preferred suppliers upon which we rely were to experience a significant business challenge, disruption, or failure due to issues such as financial difficulties or bankruptcy, issues relating to other customers such as regulatory or quality compliance issues, or other financial, legal, regulatory, or reputational issues.
Outstanding Class C 68 Table of Contents common stock may have the effect of extending voting power in Class B common stock, and may discourage potential acquisitions of our business and could have an adverse effect on the trading price of Class A common stock.
Outstanding Class C common stock may have the effect of extending voting power in Class B common stock, and may discourage potential acquisitions of our business and could have an adverse effect on the trading price of Class A common stock.
To the extent that we market or promote third-party tests or test kits outside of the uses authorized for these products or in a false or misleading manner, the tests or collection kits could be considered misbranded or adulterated and distributing them in interstate commerce could violate the FDCA.
To the extent that we marketed or promoted third-party tests or test kits outside of the uses authorized for these products or in a false or misleading manner, the tests or collection kits could be considered misbranded or adulterated and distributing them in interstate commerce could violate the FDCA.
Recent changes in patent law have made patents covering life science inventions more difficult to obtain and enforce. Further legislative changes or changes in the interpretation of existing patent law could increase the uncertainty and cost surrounding the prosecution of our owned patent applications and the maintenance, enforcement or defense of our owned patents.
Recent changes in patent law may make patents covering life science inventions more difficult to obtain and enforce. Further legislative changes or changes in the interpretation of existing patent law could increase the uncertainty and cost surrounding the prosecution of our owned patent applications and the maintenance, enforcement or defense of our owned patents.
The market, including customers and potential investors, may be skeptical of the viability and benefits of bioengineered products as well as our enabling abilities, including our platform and programs, because they are based on a relatively novel approach and the adoption of complex technology and because we are still demonstrating to the market the value of our platform.
The market, including customers and potential investors, may be skeptical of our ability to deliver on programs because they are based on a relatively novel and complex technology. 34 Table of Contents The market, including customers and potential investors, may be skeptical of the viability and benefits of bioengineered products as well as our enabling abilities, including our platform and programs, because they are based on a relatively novel approach and the adoption of complex technology and because we are still demonstrating to the market the value of our platform.
Under the strategic partnership, Ginkgo will work to develop new, state-of-the-art large language models (LLMs) running on Google Cloud's Vertex AI platform across genomics, protein function, and synthetic biology, helping Ginkgo's customers accelerate innovation and discovery in fields as diverse as drug discovery, agriculture, industrial manufacturing, and biosecurity.
Under the strategic partnership, Ginkgo has developed and will continue to develop new, state-of-the-art large language models (“LLMs”) running on Google Cloud's Vertex AI platform across genomics, protein function, and synthetic biology, helping Ginkgo's customers accelerate innovation and discovery in fields as diverse as drug discovery, agriculture, industrial manufacturing, and biosecurity.
Risks Related to the COVID-19 Pandemic We may be subject to tort liability if the COVID-19 tests we utilized in our testing programs provided inaccurate results.
Risks Related to our Historic COVID-19 Testing Services We may be subject to tort liability if the COVID-19 tests we utilized in our testing programs provided inaccurate results.
Our business depends on providing customers with technical services. In order to properly conduct our business, we need access to sufficient laboratory space and equipment to perform the activities necessary to advance and complete our programs.
Our business depends on providing customers with R&D services and tools. In order to properly conduct our business, we need access to sufficient laboratory space and equipment to perform the activities necessary to advance and complete our programs.
Our net loss attributable to our stockholders was approximately $892.9 million, $2.1 billion and $1.8 billion for the fiscal years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, we had an accumulated deficit of approximately $5.3 billion.
Our net loss attributable to our stockholders was approximately $547.0 million, $892.9 million, and $2.1 billion for the fiscal years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, we had an accumulated deficit of approximately $5.8 billion.
We have used, and may continue to use, additional capital for Biosecurity, strategic investments and acquisitions. We believe that our cash and cash equivalents, short-term investments, and interest earned on investments will be sufficient to meet our projected operating requirements for several years and until we reach profitability.
We have used, and may continue to use, additional capital for Biosecurity, strategic investments and acquisitions. We believe that our cash and cash equivalents, short-term investments, and interest earnings will be sufficient to meet our projected operating requirements until we reach profitability.
We may incur losses and negative cash flow from operating activities for the foreseeable future as we continue to invest significant additional funds toward further developing our platform, the cell programs we perform on behalf of our customers and otherwise growing our business, including our Biosecurity unit.
We may incur losses and negative cash flow from operating activities for the foreseeable future as we continue to invest significant additional funds toward further developing our platform and customer offerings, the cell engineering programs we perform on behalf of our customers and otherwise growing our business, including our Biosecurity and Automation business units.
We may not receive any further funds under those agreements, the funds we receive may be lower than projected and/or disclosed as potential downstream value, or our program costs may be higher than projected.
We may not receive any further funds or future non-cash consideration under those agreements, the funds or non-cash consideration we receive may be lower than projected and/or disclosed as potential downstream value, or our program costs may be higher than projected.
Even if an agreement is reached, the resulting relationship is not always successful, which may be for many reasons, including our inability to complete a program to our customers’ specifications or within our customers’ time frames, or unsuccessful development or commercialization of products or processes by our customers.
Even if an agreement is reached, the resulting relationship is not always successful, which may be for many reasons, including our inability to complete a program to our customers’ specifications or within our customers’ time frames, or, in the case of end-to-end cell engineering solutions, unsuccessful development or commercialization of products or processes by our customers.
All of these milestones are based on a variety of assumptions, including assumptions regarding capital resources, constraints, and priorities, progress of and results from research and development (“R&D”) activities, and other factors, any of which may cause the timing of achievement of the milestones to vary considerably.
All of these milestones are based on a variety of assumptions, including assumptions regarding capital resources, constraints, and priorities, progress of and results from R&D activities, and other factors, any of which may cause the timing of achievement of the milestones to vary considerably.
Our expenses may exceed revenues in the foreseeable future and we may not achieve profitability. If we fail to achieve profitability, or if the time required to achieve profitability is longer than we anticipate, we may not be able to expand or continue our business, and the value of our common stock could be negatively impacted.
If we fail to achieve profitability, or if the time required to achieve profitability is longer than we anticipate, we may not be able to expand or continue our business, and the value of our common stock could be negatively impacted.
To the extent we receive warrants or options in connection with future collaborations or joint ventures, we would be exposed to risks involving pricing differences between the market value of underlying securities and our exercise price for the warrants or options, a possible lack of liquidity, and the related inability to close a warrant or option position, all of which could ultimately have an adverse effect on our financial position.
In connection with future collaborations or joint ventures, we may, from time to time, receive warrants or options, all of which involve additional risks involving, for example, pricing differences between the market value of underlying securities and our exercise price for the warrants or options, a possible lack of liquidity, and the related inability to close a warrant or option position, all of which could ultimately have an adverse effect on our financial position.
We have filed, and expect to file in the future, one or more registration statements on Form S-8 under the Securities Act to register shares of Class A common stock or securities convertible into or exchangeable for shares of Class A common stock issued pursuant to our equity incentive plans.
We have filed, and expect to file in the future, one or more registration statements on Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”) to register shares of Class A common stock or securities convertible into or exchangeable for shares of Class A common stock 58 Table of Contents issued pursuant to our equity incentive plans.
We may not be able to recover our investment expenses with sufficient revenue generated by our biosecurity efforts. 34 Table of Contents Our ability to commercialize our biosecurity programs is also subject to available government, private, and multilateral funding.
We may not be able to recover our investment expenses with sufficient revenue generated by our Biosecurity efforts. Our ability to commercialize our Biosecurity offerings is also subject to available government, private, and multilateral funding.
We have acted as the authorized distributor of certain third-party COVID-19 tests and collection kits that received an EUA and supervised testing programs for COVID-19 testing customers. There can be no assurance that our test distribution and program planning activities regarding these programs would be covered under the provisions of the PREP Act.
In the past, we were the authorized distributor of certain third-party COVID-19 tests and collection kits that received an EUA and supervised testing programs for COVID-19 testing customers. There can be no assurance that our test distribution 33 Table of Contents and program planning activities regarding these programs would be covered under the provisions of the PREP Act.
As such, we rely on our customers to commercialize products that may be enabled by our engineered cells, other biological assets(e.g., enzyme DNA sequences) and/or biomanufacturing processes. A portion of the value in our customer collaborations is typically earned through downstream value sharing in the form of equity, royalty streams, or milestone payments.
For our solutions offerings, we rely on our customers to commercialize products that may be enabled by our engineered cells, other biological assets (e.g., enzyme DNA sequences) and/or biomanufacturing processes. A portion of the value in such customer collaborations has historically been earned through downstream value sharing in the form of royalty streams, milestone payments, and/or equity interests.

… 149 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed10 unchanged
Biggest changeThese briefings are also augmented by ongoing and continuous interactions between the Board and the CISO, as needed. Ginkgo's CISO has primary responsibility for assessing and managing Ginkgo’s risks from cybersecurity threats. The CISO has over 20 years of pubic- and private-sector experience in information technology and has served as Ginkgo’s CISO since 2018.
Biggest changeThese briefings are also augmented by ongoing and continuous interactions between the Board and the CISO, as needed. Ginkgo's CISO has primary responsibility for assessing and managing Ginkgo’s risks from cybersecurity threats. The CISO has over 20 years of public and private-sector experience in information technology and has served as Ginkgo’s CISO since 2018.

Item 2. Properties

Properties — owned and leased real estate

4 edited+3 added−3 removed0 unchanged
Biggest changeThe lease includes one option to extend the lease for ten years at then-market rates as well as an expansion option if the owner constructs an additional building on the property. 70 Table of Contents We also own approximately 193,000 square feet of real property in West Sacramento, California.
Biggest changeThe lease commenced on April 11, 2024, with rent payments beginning in June 2024, and it will expire on the fifteenth anniversary of the rent commencement date. The lease includes an option to extend for an additional ten years at then-market rates, as well as an expansion option if the owner constructs an additional building on the property.
Item 2. Properties. Ginkgo’s headquarters are located in the Seaport district of Boston, Massachusetts and comprise a set of non-cancellable operating leases within a facility totaling over 325,000 square feet of office and laboratory space.
Item 2. Properties. Ginkgo’s headquarters are located in the Seaport district of Boston, Massachusetts and comprise a set of non-cancellable operating leases within a facility totaling over 320,000 square feet of office and laboratory space.
In anticipation of expanding facility needs to support future growth, in April 2021, we entered into a lease, as amended, consisting of approximately 260,000 rentable square feet of new office and laboratory space being developed in Boston, Massachusetts near our headquarters.
We have exited the Cambridge spaces and they are now available for sublease in connection with our restructuring. 61 Table of Contents In April 2021, we entered into a lease, as amended, consisting of approximately 260,000 rentable square feet of new office and laboratory space being developed in Boston, Massachusetts near our headquarters.
These lease agreements expire on dates ranging from 2030 to 2036 and each contain one option to extend the lease for a five-year period at then-market rates. We also lease approximately 184,000 square feet of office and lab space in Cambridge, Massachusetts; Emeryville, California; Basel, Switzerland; Evry, France; and Zeist, Netherlands.
These lease agreements expire on dates ranging from 2030 to 2036 and each contain one option to extend the lease for a five-year period at then-market rates. Of this 320,000 square feet of leased space, 27,000 is currently subleased, with an additional 129,000 available for sublease in connection with our restructuring.
Removed
The lease commencement date is estimated to be June 1, 2024, subject to certain extensions, and expires on the fifteenth anniversary of the lease commencement date.
Added
We also lease approximately 179,000 square feet of office and lab space in Cambridge, Massachusetts; Emeryville, California; Basel, Switzerland; and Zeist, Netherlands. This includes 32,000 square feet subleased in Emeryville, and 63,000 in Cambridge with leases ending in February 2026.
Removed
We believe our facilities are adequate and suitable for our current needs and that the new lease described above provides significant expansion space.
Added
We believe our footprint prior to this new facility is now sufficient to meet our needs, therefore, this facility is available for sublease. We also own approximately 193,000 square feet of real property in West Sacramento, California, of which 3,000 is subleased and an additional 26,000 is available for sublease.
Removed
To support future organic growth or merger and acquisition activity, we may enter into new leases, assume lease obligations or acquire property both domestically and internationally and believe that, if needed, suitable or alternative space will be available.
Added
We intend to continue to evaluate our space needs and offer any excess space for subleasing.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeSee Note 11 , Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report. Item 4. Mine Safety Disclosures. Not Applicable. 71 Table of Contents PART II
Biggest changeSee Note 11 , Commitments and Contingencies, to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures. Not Applicable. 62 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−1 removed2 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A common stock and Public Warrants began trading on the NYSE under the symbols “DNA” and “DNA.WS,” respectively on September 17, 2021.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Class A common stock began trading on the NYSE under the symbol “DNA”on September 17, 2021. Prior to that date, there was no public trading market for our Class A common stock.
Performance Graph The following graph compares the cumulative total stockholder return on our Class A common stock relative to the cumulative total returns of the S&P 500 Index and the S&P Biotechnology Select Industry Index between September 17, 2021 (the date our common stock began trading on the NYSE after the SRNG Business Combination) through December 31, 2023.
Performance Graph The following graph compares the cumulative total stockholder return on our Class A common stock relative to the cumulative total returns of the S&P 500 Index and the S&P Biotechnology Select Industry Index between September 17, 2021 (the date our common stock began trading on the NYSE after the SRNG Business Combination) through December 31, 2024.
Holders of Record As of December 31, 2023, there were approximately 363 stockholders of record of our Class A common stock, 357 stockholders of record of our Class B common stock and 1 stockholder of record of our Class C common stock, which does not include persons whose stock is held in nominee or “street name” accounts through brokers, banks and intermediaries.
Holders of Record As of December 31, 2024, there were approximately 435 stockholders of record of our Class A common stock, 188 stockholders of record of our Class B common stock and 1 stockholder of record of our Class C common stock, which does not include persons whose stock is held in nominee or “street name” accounts through brokers, banks and intermediaries.
(2) Includes 7,716,048 shares of common stock issuable upon the exercise of outstanding stock options and 135,972,888 shares of common stock issuable upon settlement of outstanding restricted stock units. (3) The Plan provides that the number of shares of common stock reserved and available for issuance under the Plan shall be cumulatively increased on January 1 of each year.
(2) Includes 767,520 shares of common stock issuable upon the exercise of outstanding stock options and 3,118,556 shares of common stock issuable upon settlement of outstanding restricted stock units. (3) The Plan provides that the number of shares of common stock reserved and available for issuance under the Plan shall be cumulatively increased on January 1 of each year.
All values assume a $100 initial investment at market close on September 17, 2021 and data for the S&P 500 and the S&P Biotechnology Select indices assume reinvestment of all dividends. 72 Table of Contents Recent Sales of Unregistered Securities On November 13, 2023, we issued a total of 1,581,135 shares of our Class A common stock to the sellers of Circularis, valued at approximately $2.3 million, as consideration in connection with the acquisition of the outstanding equity interests of Circularis, in a private placement transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
All values assume a $100 initial investment at market close on September 17, 2021 and data for the S&P 500 and the S&P Biotechnology Select indices assume reinvestment of all dividends. 63 Table of Contents Recent Sales of Unregistered Securities On October 15, 2024, we issued a total of 293,578 shares of our Class A common stock to the sellers of Circularis, valued at approximately $2.5 million, as settlement for employee retention payments, in a private placement transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
Securities Authorized for Issuance Under Equity Compensation Plans Number of securities to be issued upon exercise of outstanding options and vesting of outstanding restricted stock units (#) Weighted-average exercise price of outstanding options ($) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) (#) Equity compensation plans approved by security holders (1) 143,688,936 (2) $ 0.70 183,048,456 (3) Equity compensation plans not approved by security holders (4) 16,194,690 — 8,805,310 Total 159,883,626 $ 0.70 191,853,766 (1) Includes the Ginkgo Bioworks Holdings, Inc. 2021 Equity Incentive Plan.
Securities Authorized for Issuance Under Equity Compensation Plans Number of securities to be issued upon exercise of outstanding options and vesting of outstanding restricted stock units (#) Weighted-average exercise price of outstanding options ($) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) (#) Equity compensation plans approved by security holders (1) 3,886,076 (2) $ 73.92 4,868,329 (3) Equity compensation plans not approved by security holders (4) 208,842 — 186,770 Total 4,094,918 $ 73.92 5,055,099 (1) Includes the Ginkgo Bioworks Holdings, Inc. 2021 Equity Incentive Plan.
On December 14, 2023, we issued a total of 1,826,414 shares of our Class A common stock to the sellers of FGen, valued at approximately $2.5 million, as settlement for employee retention payments, in a private placement transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) of the Securities Act.
On October 17, 2024 and November 26, 2024, we issued a total of 622,026 shares of our Class A common stock to certain former equity holders of FGen AG, valued at approximately $4.8 million, in connection with the achievement of certain milestones, in a private placement transaction exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act.
Removed
Prior to that date, there was no public trading market for our Class A common stock and Public Warrants.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+71 added−109 removed26 unchanged
Biggest changeOur income tax provision may be significantly affected by changes to our estimates. 82 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table presents our result of operations for the periods indicated: Years Ended December 31, (in thousands) 2023 2022 Change Cell Engineering revenue $ 143,531 $ 143,666 $ (135) Biosecurity revenue: Product 28,949 35,455 (6,506) Service 78,975 298,585 (219,610) Total revenue 251,455 477,706 (226,251) Costs and operating expenses: Cost of Biosecurity product revenue 7,481 20,646 (13,165) Cost of Biosecurity service revenue 46,524 183,570 (137,046) Research and development (1) 580,621 1,052,643 (472,022) General and administrative (1) 385,025 1,429,799 (1,044,774) Impairment of lease assets 96,210 — 96,210 Total operating expenses 1,115,861 2,686,658 (1,570,797) Loss from operations (864,406) (2,208,952) 1,344,546 Other income (expense): Interest income 57,217 20,262 36,955 Interest expense (93) (106) 13 Loss on equity method investments (2,635) (43,761) 41,126 Loss on investments (54,827) (53,335) (1,492) Change in fair value of warrant liabilities 5,168 124,970 (119,802) (Loss) gain on deconsolidation of subsidiaries (42,502) 31,889 (74,391) Other income (expense), net 9,138 7,634 1,504 Total other income (expense), net (28,534) 87,553 (116,087) Loss before income taxes (892,940) (2,121,399) 1,228,459 Income tax benefit (71) (15,027) 14,956 Net loss (892,869) (2,106,372) 1,213,503 Loss attributable to non-controlling interest — (1,443) 1,443 Net loss attributable to Ginkgo Bioworks Holdings, Inc. stockholders $ (892,869) $ (2,104,929) $ 1,212,060 (1) R&D and G&A expenses included a significant charge for stock-based compensation expense as a result of the modification of the vesting terms of RSUs and related earnout shares (as further described above in “Modification of Equity Awards in Connection with 83 Table of Contents SRNG Business Combination”).
Biggest changeResults of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table presents our result of operations for the periods indicated: Year Ended December 31, (in thousands) 2024 2023 Change Cell Engineering revenue $ 173,972 $ 143,531 $ 30,441 Biosecurity revenue: Service 53,071 78,975 (25,904) Product — 28,949 (28,949) Total revenue 227,043 251,455 (24,412) Costs and operating expenses: Cost of Biosecurity service revenue 38,549 46,524 (7,975) Cost of Biosecurity product revenue — 7,481 (7,481) Cost of other revenue 5,999 — 5,999 Research and development (1) 424,061 580,621 (156,560) General and administrative (1) 246,161 385,025 (138,864) Impairment of lease assets — 96,210 (96,210) Goodwill impairment 47,858 — 47,858 Restructuring charges 24,172 — 24,172 Total operating expenses 786,800 1,115,861 (329,061) Loss from operations (559,757) (864,406) 304,649 Other income (expense): Interest income 38,612 57,217 (18,605) Interest expense (94) (93) (1) Loss on equity method investments — (2,635) 2,635 Loss on investments (28,827) (54,827) 26,000 Loss on deconsolidation of subsidiaries (7,013) (42,502) 35,489 Change in fair value of warrant liabilities 5,701 5,168 533 Other income, net 3,870 9,138 (5,268) Total other income (expense) 12,249 (28,534) 40,783 Loss before income taxes (547,508) (892,940) 345,432 Income tax benefit (479) (71) (408) Net loss $ (547,029) $ (892,869) $ 345,840 71 Table of Contents (1) The following table presents the allocation of stock-based compensation expense, inclusive of employer payroll taxes.
Investing Activities Net cash used in investing activities for the year ended December 31, 2023, primarily consisted of purchases of property and equipment of $40.8 million associated with Foundry capacity and capability investments, relinquishment of $43.0 million in cash upon the deconsolidation of Zymergen, offset by $4.4 million in proceeds from the sale of equipment.
Net cash used in investing activities for the year ended December 31, 2023 primarily consisted of purchases of property and equipment of $40.8 million associated with Foundry capacity and capability investments, relinquishment of $43.0 million in cash upon the deconsolidation of Zymergen, offset by $4.4 million in proceeds from the sale of equipment.
Financing Activities Net cash used in financing activities for the year ended December 31, 2023, primarily consisted of principal payments on finance leases and payments of contingent consideration related to business acquisitions.
Net cash used in financing activities for the year ended December 31, 2023 primarily consisted of principal payments on finance leases and payments of contingent consideration related to business acquisitions.
We typically structure Cell Engineering revenue to include some combination of the following: • service fees, which may comprise cash and/or non-cash consideration, in the form of: ◦ upfront payments upon consummation of an agreement or other fixed payments that are generally recognized over our period of performance; ◦ reimbursement for costs incurred for R&D services; ◦ milestone payments upon the achievement of specified technical criteria; plus, • downstream value share payments in the form of: ◦ milestone payments, which may comprise cash and/or non-cash consideration, upon the achievement of specified commercial criteria; ◦ royalties on sales of products from or comprising engineered organisms; ◦ royalties related to cost of goods sold reductions realized by our customers; or, • downstream value share in the form of equity interests in our customer. ◦ downstream value share in the form of equity interest appreciation is not recognized as revenue but is expected to contribute to future cash flows upon liquidation, the amount and timing of which is inherently unpredictable.
We typically structure Cell Engineering revenue to include some combination of the following: • service fees, which may comprise cash and/or non-cash consideration, in the form of: ◦ upfront payments upon consummation of an agreement or other fixed payments that are generally recognized over our period of performance; ◦ reimbursement for costs incurred for R&D services; ◦ milestone payments upon the achievement of specified technical criteria; plus, when applicable, • downstream value share payments in the form of: ◦ milestone payments, which may comprise cash and/or non-cash consideration, upon the achievement of specified commercial criteria; ◦ royalties on sales of products from or comprising engineered organisms; ◦ royalties related to cost of goods sold reductions realized by our customers; or, • downstream value share in the form of equity interests in our customer. ◦ downstream value share in the form of equity interest appreciation is not recognized as revenue but is expected to contribute to future cash flows upon liquidation, the amount and timing of which is inherently unpredictable.
See Note 8 to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for more information. Purchase Obligations In August 2023, we entered into a five-year strategic cloud and AI partnership with Google Cloud, which includes minimum annual commitments to purchase cloud hosting services.
See Note 9 to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for more information. Purchase Obligations In August 2023, we entered into a five-year strategic cloud and AI partnership with Google Cloud, which includes minimum annual commitments to purchase cloud hosting services.
The activities above incur the following expenses: • laboratory supplies, consumables and related services provided under agreements with third parties and in-licensing arrangements; • personnel compensation and benefits; and • rent, facilities, depreciation, software, professional fees and other direct and allocated overhead expenses. We expense R&D costs as incurred.
The activities above incur the following expenses: • personnel compensation and benefits; • rent, facilities, depreciation, software, professional fees and other direct and allocated overhead expenses; and • laboratory supplies, consumables and related services provided under agreements with third parties and in-licensing arrangements. We expense R&D expenses as incurred.
Generally, the terms of these agreements provide that we receive some combination of: (1) service fees in the form of (i) upfront payments upon consummation of the agreement or other fixed payments, (ii) reimbursement for costs incurred for R&D services and (iii) milestone payments upon the achievement of specified technical criteria, plus (2) downstream value share payments in the form of (i) milestone payments upon the achievement of specified commercial criteria, (ii) royalties on sales of products 79 Table of Contents from or comprising engineered organisms arising from the collaboration or licensing agreement and (iii) royalties related to cost of goods sold reductions realized by our customers.
Generally, the terms of these agreements provide that we receive some combination of: (1) service fees in the form of (i) upfront payments upon consummation of the agreement or other fixed payments, (ii) reimbursement for costs incurred for R&D services and (iii) milestone payments upon the achievement of specified technical criteria, plus (2) downstream value share payments in the form of (i) milestone payments upon the achievement of specified commercial criteria, (ii) royalties on sales of products from or comprising engineered organisms arising from the collaboration or licensing agreement and/or (iii) royalties related to cost of goods sold reductions realized by our customers.
We earn Cell Engineering revenue for our R&D services as well as through a share of the value of products created using our platform.
We earn Cell Engineering revenue for our R&D services as well as generally through a share of the value of products created using our platform.
Revenue Recognition Cell Engineering Revenue For certain Cell Engineering revenue agreements, we recognize revenue over the period of performance using a measure of progress based on costs incurred to date relative to total expected costs (i.e., cost-to-cost method). A significant level of judgment is involved in estimating the total expected costs.
Revenue Recognition Cell Engineering Revenue For certain Cell Engineering revenue contracts, we recognize revenue over the period of performance using a measure of progress based on costs incurred to date relative to total expected costs (i.e., cost-to-cost method). A significant level of judgment is involved in estimating the total expected costs.
These service offerings generally consist of multiple promised goods and services including, but not limited to, sample collection, sample storage and transportation, outsourced laboratory analysis, access to results reported through a web-based portal, analytical reporting of results, and overall program management.
These service offerings generally consist of goods and services including, but not limited to, sample collection, sample storage and transportation, outsourced laboratory analysis, access to results reported through a web-based portal, analytical reporting of results, and overall program management.
See Notes 5 and 16 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details of our investments in and the material terms of our agreements with our Platform Ventures and Structured Partnerships.
See Notes 6 and 16 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details of our investments in and the material terms of our agreements with our Platform Ventures and Structured Partnerships.
Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in Item 1A. “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K. 73 Table of Contents Overview Our mission is to make biology easier to engineer.
Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in Item 1A. “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K. Overview Our mission is to make biology easier to engineer.
Further, this section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. For discussion related to 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K, please refer to Part II, Item 7.
Further, this section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. For discussion related to 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K, please refer to Part II, Item 7.
The net change in operating assets and liabilities was primarily due to (i) a $50.1 million decrease in accounts receivable from collections of Biosecurity receivables and the end of COVID-19 testing in schools in the third quarter of 2023, (ii) a $10.5 million decrease in prepaid expenses and other current assets primarily from depletion of inventory coinciding with the reduction of Biosecurity product revenue in the third quarter plus the timing of directors and officers insurance payments in the prior year, (iii) a $9.3 million decrease in operating lease right-of-use assets from lease incentives received, (iv) a $16.9 million increase in accrued expenses and other current liabilities primarily from accrued litigation costs, partially offset by (v) a $35.9 million decrease in deferred revenue and (vi) a $22.8 million decrease in operating lease liabilities from rent payments.
The net change in operating assets and liabilities was primarily driven by (i) a $50.1 million decrease in accounts receivable from collections of Biosecurity receivables and the end of COVID-19 testing in schools in 2023, (ii) a $10.5 million decrease in prepaid expenses and other current assets primarily from depletion of inventory coinciding with the reduction of Biosecurity product revenue plus the timing of directors and officers insurance payments in the prior year, (iii) a $9.3 million decrease in operating lease right-of-use assets from lease incentives received, (iv) a $16.9 million increase in accrued expenses and other current liabilities primarily from accrued litigation costs, partially offset by (v) a $35.9 million decrease in deferred revenue and (vi) a $22.8 million decrease in operating lease liabilities from rent payments.
In general, these agreements stipulate that we are entitled to compensation for service revenue as services are performed and for product revenue upon delivery of diagnostic test kits. The timing of revenue recognition depends on the identified performance obligations but is generally recognized ratably over time or as results are reported to the customer.
In general, these agreements stipulate that we are entitled to compensation for service revenue as services are performed, and for product revenue, prior to 2024, upon delivery of diagnostic test kits. The timing of revenue recognition depends on the identified performance obligations but is generally recognized over time or as results are reported to the customer.
We are also engaged in a series of smaller partnerships that generate revenues through biosecurity services and R&D. We generate service revenue through the sale of our end-to-end biomonitoring and bioinformatic support services.
We are also engaged in a series of smaller partnerships that generate revenues through biosecurity services and R&D. We generate service revenue through the sale of our end-to-end biomonitoring and bioinformatics support services.
We view the upfront non-cash consideration as prepayments for licenses which will be granted in the future as we complete mutually agreed upon technical development plans. In these instances, we also receive cash consideration for the R&D services performed by us on a fixed fee or cost-plus basis.
We view the upfront non-cash consideration as prepayments for licenses which will be granted in the future as we complete mutually agreed upon technical development plans. In these instances, we also receive cash consideration for the R&D services 67 Table of Contents performed by us on a fixed fee or cost-plus basis.
Customer arrangements which involve non-cash consideration generally fall into two categories: Platform Ventures and Structured Partnerships. 75 Table of Contents Platform Ventures Platform Ventures enable Ginkgo to partner with leading multinationals and financial investors to form new ventures in identified market segments with potential to benefit from synthetic biology.
Customer arrangements which involve non-cash consideration generally fall into two categories: Platform Ventures and Structured Partnerships. Platform Ventures Platform Ventures enable Ginkgo to partner with leading multinationals and financial investors to form new ventures in identified market segments with potential to benefit from synthetic biology.
In exchange for an equity position in the venture, we contribute license rights to our proprietary cell programming technology and intellectual property, while our partners contribute relevant industry expertise, other resources and venture funding. We also provide R&D services for which we receive cash consideration on a fixed-fee or cost-plus basis. Platform Ventures include: Motif FoodWorks, Inc.
In exchange for an equity position in the venture, we contribute license rights to our proprietary cell programming technology and intellectual property, while our partners contribute relevant industry expertise, other resources and venture funding. We also provide R&D services for which we receive cash consideration on a fixed-fee or cost-plus basis.
As of December 31, 2023, we had federal net operating loss carryforwards of approximately $1.0 billion, of which $139.2 million will begin to expire in 2029 and $884.1 million can be carried forward indefinitely.
As of December 31, 2024, we had federal net operating loss carryforwards of approximately $1.2 billion, of which $139.2 million will begin to expire in 2029 and $1.1 billion can be carried forward indefinitely.
Components of Results of Operations Revenue Cell Engineering Revenue We generate Cell Engineering revenue through the execution of license and collaboration agreements whereby customers obtain license rights to our proprietary technology and intellectual property for use in the development and commercialization of engineered organisms and derived products.
Components of Results of Operations Revenue Cell Engineering Revenue We generate Cell Engineering revenue primarily through license and collaboration agreements, under which customers obtain rights to our proprietary technology and intellectual property for use in the development and commercialization of engineered organisms and derived products.
As of December 31, 2023, we had cash and cash equivalents of $944.1 million which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Annual Report on Form 10-K.
As of December 31, 2024, we had cash and cash equivalents of $561.6 million, which we believe will be sufficient to enable us to fund our projected operations through at least the next 12 months from the date of filing of this Annual Report on Form 10-K.
When estimating total expected costs, we make assumptions and estimates regarding the contracted scope of work, tasks required to complete each project, technical and schedule risks associated with the science, the expected duration of each project, and the total amount of internal and 89 Table of Contents external (i.e., subcontractor) resources required.
When estimating total expected costs, we make assumptions and estimates regarding the contracted scope of work, tasks required to complete each project, technical and schedule risks associated with the science, the expected duration of each project, and the total amount of internal and external resources required.
Additionally, we negotiate a value share with our customers (typically in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.
Additionally, we have historically negotiated a value share with our customers (in the form of royalties, milestones, and/or equity interests) in order to align our economics with the success of the programs enabled by our platform.
We grant the customer a prepaid Cell Engineering services credit in exchange for the upfront non-cash consideration, which can be drawn down as payment for R&D services performed under mutually agreed upon development plans.
We issued the customer a prepaid Cell Engineering services credit in exchange for the upfront non-cash consideration, which can and has been drawn down as payment for R&D services performed under mutually agreed upon development plans.
Material Cash Requirements We anticipate that our expenditures will exceed our revenue through at least the next 12 months from the date of filing of this Annual Report on Form 10-K, as we: • continue our R&D, activities under existing and new programs and further invest in our Foundry and Codebase; • hire additional personnel and secure facilities to support our expanding R&D efforts; • develop and expand our offerings, including Biosecurity; 87 Table of Contents • upgrade and expand our operational, financial and management systems and support our operations; • acquire and integrate companies, assets or intellectual property that advance our company objectives; and • maintain, expand, and protect our intellectual property.
Material Cash Requirements We anticipate that our expenditures will exceed our revenue through at least the next 12 months from the date of filing of this Annual Report on Form 10-K, as we: • continue our R&D activities under existing and new programs and further invest in our Foundry and Codebase; • develop and expand our offerings, including Biosecurity; • upgrade, expand or adapt our operational, financial and management systems and support our operations; • potentially acquire and integrate companies, assets or intellectual property that advance our company objectives; • maintain, expand, and protect our intellectual property; and • continue our restructuring actions.
(3) Represents transaction and integration costs directly related to mergers and acquisitions, including: (i) due diligence, legal, consulting and accounting fees associated with acquisitions, (ii) post-acquisition employee retention bonuses and severance payments, (iii) the fair value adjustments to contingent consideration liabilities resulting from acquisitions, (iv) acquired intangible assets expensed as in-process research and development, and (v) costs associated with the Zymergen Bankruptcy, as well as securities litigation costs, net of insurance recovery.
(5) Represents transaction and integration costs directly related to mergers and acquisitions, including: (i) due diligence, legal, consulting and accounting fees associated with acquisitions, (ii) post-acquisition employee retention bonuses and severance payments, (iii) the fair value adjustments to contingent consideration liabilities resulting from acquisitions, and (iv) costs associated with the Zymergen Bankruptcy, as well as securities litigation costs, net of insurance recovery.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K, filed with the United States Securities and Exchange Commission on March 13, 2023. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties.
Management’s Discussion and Analysis of Financial Condition 64 Table of Contents and Results of Operations in our 2023 Form 10-K, filed with the United States Securities and Exchange Commission on February 29, 2024. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve risks and uncertainties.
Before the fourth quarter of 2023, we generated product revenue by selling lateral flow assay (“LFA”) diagnostic test kits, polymerase chain reaction (“PCR”) sample collection kits, and pooled test kits associated with COVID-19 tests to customers on a standalone basis.
Prior to 2024, we generated product revenue by selling lateral flow assay (“LFA”) diagnostic test kits, polymerase chain reaction (“PCR”) sample collection kits, and pooled test kits associated with COVID-19 tests to customers on a standalone basis.
Leases We have various noncancelable operating leases for office and laboratory space, with significant leases expiring between 2030 and 2036. As of December 31, 2023 , we have minimum rental commitments under noncancellable operating leases of $43.6 million in 2024 and $387.5 million thereafter.
Leases We have various noncancelable operating leases for office and laboratory space, with significant leases expiring between 2030 and 2036. As of December 31, 2024 , we have minimum rental commitments under noncancellable operating leases of $61.2 million in 2025 and $662.5 million thereafter.
We are building the future bioeconomy with our customers and partners, and we envision the future of biosecurity as a global immune system equipped with the capabilities to prevent, detect, and respond to biological threats.
We are building the future bioeconomy with our customers and partners, and we envision the future of biosecurity as a global immune system equipped with the capabilities to rapidly and reliably identify, monitor, prevent, and mitigate biological threats.
Certain customer agreements contain payment in the form of shares of equity securities or other financial instruments that are convertible into equity upon a triggering event. Any non-cash consideration is measured at the estimated fair value of the non-cash consideration at contract inception.
Certain customer contracts include payment in the form of equity securities or other financial instruments that convert into equity upon a triggering event. Any non-cash consideration is measured at its estimated fair value at contract inception.
Costs and Operating Expenses Cost of Biosecurity Product Revenue Before the fourth quarter of 2023, cost of Biosecurity product revenue consisted of costs associated with the sale of diagnostic and sample collection test kits, which included costs incurred to purchase test kits from third parties.
Cost of Biosecurity Product Revenue Prior to 2024, the cost of Biosecurity product revenue consisted of costs associated with the sale of diagnostic and sample collection test kits, which included costs incurred to purchase test kits from third parties.
While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates.
The effects of material revisions in estimates, if any, are reflected in our consolidated financial statements prospectively from the date of change in estimates. 77 Table of Contents While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates.
Biosecurity Revenue We offer biomonitoring and bioinformatic support services internationally as well as domestically. We are currently offering biomonitoring and bioinformatic support services domestically through our partnerships with the CDC and XpresCheck, and internationally through our international programs, including those in Qatar, Rwanda and Ukraine.
Biosecurity Revenue We offer biosecurity services through our two core offerings: Canopy and Horizon. We are currently offering biomonitoring and bioinformatics support services domestically through our partnerships with the CDC and XpresCheck, and internationally through our international programs, including those in Qatar and Ukraine.
Loss on Equity Method Investments Loss on equity method investments includes our share of losses from certain of our equity method investments under the hypothetical liquidation at book value (“HLBV”) method.
Interest Income Interest income consists primarily of interest earned on our cash and cash equivalents. Loss on Equity Method Investments Loss on equity method investments includes our share of losses from certain of our equity method investments under the hypothetical liquidation at book value (“HLBV”) method.
Under this agreement, we are obligated to spend a minimum of $58.0 million over the four-year term, with approximately $17.6 million payable in the next 12 months and $23.0 million thereafter.
Under this agreement, we are obligated to spend a minimum of $58.0 million over the four-year term, with approximately $24.8 million payable in 2025 and $4.8 million thereafter.
Non-cash adjustments primarily consisted of $70.5 million of depreciation and amortization, $229.9 million of stock-based compensation, $57.5 million loss on investments including equity method investments, $9.2 million loss on the change in fair value of contingent consideration liabilities, $28.3 million of non-cash lease expense, $121.4 million in impairments of long-lived assets, and $42.5 million loss on deconsolidation of Zymergen. 88 Table of Contents Net cash used in operating activities for the year ended December 31, 2022 consisted of net loss of $2.1 billion, adjusted for net change in operating assets and liabilities of $37.0 million and non-cash charges of $1.9 billion.
Non-cash adjustments primarily consisted of $70.5 million of depreciation and amortization, $229.9 million of stock-based compensation, $57.5 million loss on investments including equity method investments, $9.2 million loss on the change in fair value of contingent consideration liabilities, $28.3 million of non-cash lease expense, $121.4 million in impairments of long-lived assets, and $42.5 million loss on deconsolidation of Zymergen.
We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation expense, gain or loss on equity method investments, gain or loss on investments, change in fair value of warrant liabilities, gain or loss on deconsolidation of subsidiaries, transaction and integration costs associated with planned, completed or terminated mergers and acquisitions, including related litigation costs, acquired in-process research and development expenses, impairment charges, costs associated with the Zymergen Bankruptcy, and other income and expenses.
We define Adjusted EBITDA as EBITDA adjusted for stock-based compensation expense, gain or loss on equity method investments, gain or loss on investments, change in fair value of warrant liabilities, gain or loss on deconsolidation of subsidiaries, transaction and integration costs associated with planned, completed or terminated mergers and acquisitions, including related litigation costs, restructuring and impairment charges (inclusive of impairments of goodwill and long-lived assets), costs associated with the bankruptcy filing of our former subsidiary, Zymergen (the “Zymergen 74 Table of Contents Bankruptcy”), and certain other income and expenses.
As of December 31, 2023, the remaining aggregate commitment was $286.1 million, with approximately $14.4 million payable in the next 12 months and $271.7 million thereafter. In March 2022, we entered into a four-year noncancelable supply agreement with Twist for the purchase of diverse products including synthetic DNA.
As of December 31, 2024, the remaining aggregate commitment was $279.3 million, with approximately $44.3 million payable in 2025 and $235.0 million thereafter. In March 2022, we entered into a four-year noncancelable supply agreement with Twist for the purchase of diverse products including synthetic DNA.
Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, are reflected in our consolidated financial statements prospectively from the date of change in estimates.
Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience.
Cell Engineering revenue also includes transactions with Startup Structured Partnerships where, as part of these transactions, we received upfront non-cash consideration in the form of current equity interests or financial instruments that are convertible into equity upon a triggering event.
These arrangements are further described in Notes 6 , 7 , 16 and 20 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.Cell Engineering revenue also includes transactions with Startup Structured Partnerships where, as part of these transactions, we received upfront non-cash consideration in the form of current equity interests or financial instruments that are convertible into equity upon a triggering event.
The impact of the modification on stock-based compensation expense has significantly diminished by the end of 2023. General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of costs for personnel in executive, business development, finance, human resources, legal and other corporate administrative functions.
General and Administrative Expenses General and administrative (“G&A”) expenses consist primarily of costs for personnel in executive, business development, finance, human resources, legal and other corporate administrative functions.
In 2023 and 2022, we entered into 6 and 11 Startup Structured Partnerships, respectively, and received prepayments of service fees in the form of equity securities or convertible financial instruments in the amount of $18.9 million and $30.7 million, respectively, that is recognized as revenue over our period of performance. Our Legacy Structured Partnerships are described below: Genomatica, Inc.
In 2024, we did not enter into 66 Table of Contents any new Startup Structured Partnerships. In 2023, we entered into six Startup Structured Partnerships and received prepayments of service fees in the form of equity securities or convertible financial instruments in the amount of $18.9 million that is recognized as revenue over our period of performance.
The first, critical step in realizing this future is to build a robust early warning system for biological threats—this is the primary focus of Ginkgo’s Biosecurity business. Our biosecurity offering includes biomonitoring and bioinformatic support services internationally as well as domestically.
The first, critical step in realizing this future is to build a robust early warning system for biological threats—this is the primary focus of Ginkgo’s Biosecurity business. 65 Table of Contents Our primary biosecurity customers are governments.
As of December 31, 2023, we had state net operating loss carryforwards of approximately $998.2 million, of which $869.2 million will begin to expire in 2030 and $129.0 million can be carried forward indefinitely. As of December 31, 2023, we had foreign net operating losses of approximately $1.7 million, which can be carried forward indefinitely.
As of December 31, 2024, we had state net operating loss carryforwards of approximately $1.2 billion, of which $991.7 million will begin to expire in 2030 and $162.3 million can be carried forward indefinitely. As of December 31, 2024, we had federal research and development tax credit carryforwards of approximately $37.7 million, which will begin to expire in 2029.
These metrics may change or be substituted for additional or different metrics as our business develops.
We may in the future report on key business metrics, which metrics may change or be substituted for additional or different metrics as our business develops.
Provision for Income Taxes Income taxes are recorded in accordance with ASC 740 , Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our audited consolidated financial statements or tax returns.
We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in our audited consolidated financial statements or tax returns.
(2) For the year ended December 31, 2023, includes $25.2 million impairment loss on lab equipment and $96.2 million impairment loss on a right-of-use asset and the related leasehold improvements associated with an exited Zymergen leased facility.
Impairment of Lease Assets In 2023, we recognized an impairment loss of $96.2 million related to a right-of-use asset and the associated leasehold improvements for an exited Zymergen leased facility.
Cash Flows The following table provides information regarding our cash flows for each period presented: Year Ended December 31, (in thousands) 2023 2022 Net cash (used in) provided by: Operating activities $ (295,500) $ (252,198) Investing activities (80,693) (67,394) Financing activities (3,216) 95,337 Effect of exchange rate changes (588) 908 Net decrease in cash, cash equivalents and restricted cash $ (379,997) $ (223,347) Operating Activities Net cash used in operating activities for the year ended December 31, 2023 consisted of net loss of $892.9 million, adjusted for net change in operating assets and liabilities of $29.8 million and non-cash charges of $567.5 million.
Cash Flows The following table provides information regarding our cash flows for each period presented: Year Ended December 31, (in thousands) 2024 2023 Net cash used in: Operating activities $ (319,585) $ (295,500) Investing activities (62,236) (80,693) Financing activities (1,739) (3,216) Effect of exchange rate changes (281) (588) Net decrease in cash, cash equivalents and restricted cash $ (383,841) $ (379,997) 76 Table of Contents Operating Activities Net cash used in operating activities for the year ended December 31, 2024 consisted of a net loss of $547.0 million, adjusted for a net decrease in cash due to changes in operating assets and liabilities of $89.7 million and non-cash charges of $317.1 million.
This includes costs incurred for sample collection equipment and materials, outsourced laboratory analysis, access to results reported through our proprietary web-based portal, and reporting of results to public authorities. 80 Table of Contents Additionally, the cost of Biosecurity service revenue includes direct labor cost associated with bioinformatics, lab network management, delivery logistics, and customer support.
Costs and Operating Expenses Cost of Biosecurity Service Revenue The cost of Biosecurity service revenue consists of costs related to our biomonitoring and bioinformatics support services. This includes costs incurred for sample collection equipment and materials, outsourced laboratory analysis, access to results reported through our proprietary web-based portal, and reporting of results to government and non-government customers.
Research and Development Expenses The nature of our business, and primary focus of our activities, generates a significant amount of R&D expenses. R&D expenses represent costs incurred by us for the following: • development, operation, expansion and enhancement of our Foundry and Codebase; and • development of new offerings, such as Biosecurity.
R&D expenses represent costs incurred by us for the following: • development, operation, expansion and enhancement of our Foundry and Codebase; 68 Table of Contents • costs incurred to deliver our end-to-end cell engineering solutions offering to customers; and • development of new offerings, such as Biosecurity.
As we add new programs, our portfolio of programs with this “downstream” value potential grows. 74 Table of Contents With a mission to make biology easier to engineer, we have always recognized the need to invest in biosecurity as a key component of our platform.
In addition, we offer support services with fixed fees covering the support periods. Biosecurity With a mission to make biology easier to engineer, we have always recognized the need to invest in biosecurity as a key component of our platform.
Other Income (Expense), Net Other income (expense), net primarily consists of sublease rent income, changes in fair value of notes receivable that we elected to account for under the fair value option and loss on disposal of equipment.
Other Income, Net Other income, net primarily consists of sublease rent income and changes in fair value of notes receivable that we elected to account for under the fair value option. Provision for Income Taxes Income taxes are recorded in accordance with ASC 740 , Income Taxes , which provides for deferred taxes using an asset and liability approach.
Liquidity and Capital Resources Sources of Liquidity Upon the closing of the SRNG Business Combination in September 2021, we received net proceeds totaling approximately $1,509.6 million, inclusive of $760.0 million from investments from certain accredited investors for 76 million shares of our Class A common stock at a price of $10.00 per share.
Accordingly, all common shares presented herein have been retrospectively adjusted to reflect the reverse stock split. Sources of Liquidity Upon the closing of our merger with SRNG in September 2021, we received net proceeds totaling approximately $1.5 billion, inclusive of $760.0 million from investments from certain accredited investors for 1.9 million shares of our Class A common stock.
Royalties did not comprise a material amount of our revenue during any of the periods presented. Cell Engineering revenue includes transactions with Platform Ventures and Legacy Structured Partnerships where, as part of these transactions, we received an equity interest in such entities.
There has been no material impact on our revenue recognition policies to date from the announced changes in our new commercial terms and Cell Engineering offerings. Cell Engineering revenue includes transactions with Platform Ventures and Legacy Structured Partnerships where, as part of these transactions, we received an equity interest in such entities.
Under the HLBV method, we absorb losses as a common unit holder prior to preferred unit holders due to a substantive profit-sharing agreement where the preferred unit holders receive preferential distribution rights. Because we have no commitment to fund the losses of our equity method investees, no further losses on these investments were recognized during the periods presented.
The 2023 loss represented our share of losses from certain equity method investees resulting from the application of the HLBV method. Under the HLBV method, as a common unit holder, we absorb losses before preferred unit holders due to a substantive profit-sharing agreement that grants preferred unit holders preferential distribution rights.
Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities includes the change in fair value of private placement warrants (“Private Placement Warrants”) and publicly traded warrants (“Public Warrants”), which are classified as liabilities and were assumed as part of the SRNG Business Combination. Warrant liabilities are marked to market at each balance sheet date.
Change in Fair Value of Warrant Liabilities The change in fair value of warrant liabilities reflects adjustments to the fair value of private placement warrants (“Private Placement Warrants”) and warrants formerly publicly traded on the NYSE (“Public Warrants”). These warrants, classified as liabilities, were assumed as part of our merger with Soaring Eagle Acquisition Corp.
We evaluate our measure of progress to recognize revenue for these agreements at each reporting date and, as necessary, adjust the measure of progress and related revenue recognition. We also evaluate contract modifications and amendments to determine whether any changes should be accounted for prospectively or on a cumulative catch-up basis.
If a material right is identified, the option is treated as a separate performance obligation, and the revenue allocated to the option is deferred until the option is either exercised or expires. We also evaluate contract modifications and amendments to determine whether any changes should be accounted for as a separate contract, prospectively or on a cumulative catch-up basis.
The change in fair value of warrant liabilities is primarily driven by changes in the value of our common stock. Increases or decreases in the value of our common stock results in a loss or gain, respectively, on the change in fair value of warrant liabilities.
Increases or decreases in the value of our common stock result in a loss or gain, respectively, in the fair value of warrant liabilities. There was substantially no value related to these warrant liabilities as of December 31, 2024.
Impairment of Long-Lived Assets We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate.
Changes in these assumptions can materially affect the fair value of the non-cash consideration and, consequently, the total revenue recognized for the contract. Impairment of Long-Lived Assets We review our long-lived assets and asset groups for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.
As of December 31, 2023, we had federal research and development tax credit carryforwards of approximately $40.4 million, which will begin to expire in 2029. As of December 31, 2023, we also had state research and development and investment tax credit carryforwards of approximately $30.1 million, which will begin to expire in 2030.
As of December 31, 2024, we also had state research and development and investment tax credit carryforwards of approximately $30.2 million, which will begin to expire in 2030. 70 Table of Contents Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, R&D tax credits and other permanent differences.
Additionally, services revenue increased due to the launch of New Programs and was partially offset by the completion of certain programs. As discussed above in Components of Results of Operations, Cell Engineering revenue comprises both cash and non-cash consideration.
As discussed above in Components of Results of Operations, Cell Engineering revenue comprises both cash and non-cash consideration. Cell Engineering revenue recognized relating to non-cash consideration increased from $48.5 million in 2023 to $61.4 million in 2024.
For equity securities and financial instruments received that are not actively traded, we generally engage a third-party valuation specialist to determine the estimated fair value of the upfront non-cash consideration. The fair value is generally determined based on a recent round of financing or by using a scenario-based valuation model.
For equity securities and financial instruments that are not actively traded, we generally determine the estimated fair value by referencing a recent financing round or utilizing a scenario-based valuation model. Significant unobservable inputs are used in these valuations, including expectations regarding future financings of the customer, scenario dates and probabilities, expected volatility, discount rates, and recovery rates.
(Loss) Gain on Deconsolidation of Subsidiaries In 2023, we recorded a $42.5 million loss on our deconsolidation of Zymergen following Zymergen's bankruptcy filing in October 2023. In 2022, we recorded a $31.9 million gain on our deconsolidation of Verb and Ayana equal to the fair value of our retained interest in each entity measured as of the deconsolidation date.
Loss on Deconsolidation of Subsidiaries In 2024, we recorded a $7.0 million loss on the deconsolidation of our former foreign subsidiary Altar as a result of a sale of this business. In 2023, we recorded a $42.5 million loss on the deconsolidation of Zymergen following Zymergen's bankruptcy filing in October 2023.
We compensate for these limitations by providing a reconciliation of EBITDA and Adjusted EBITDA to their most directly comparable GAAP financial measure. 86 Table of Contents The following table reconciles net loss attributable to Ginkgo Bioworks Holdings, Inc. stockholders to EBITDA and Adjusted EBITDA for the years ended December 31, 2023 and 2022, respectively: Year Ended December 31, (in thousands) 2023 2022 Net loss attributable to Ginkgo Bioworks Holdings, Inc. stockholders $ (892,869) $ (2,104,929) Interest income (57,217) (20,262) Interest expense 93 106 Income tax benefit (71) (15,027) Depreciation and amortization 70,507 42,552 EBITDA (879,557) (2,097,560) Stock-based compensation (1) 234,908 1,940,920 Impairment of long-lived assets (2) 121,404 — Merger and acquisition related expenses (3) 70,771 46,229 Loss on investments 54,827 53,335 Loss (gain) on deconsolidation of subsidiaries 42,502 (31,889) Loss on equity method investments (4) 2,635 45,315 Change in fair value of warrant liabilities (5,168) (124,970) Change in fair value of notes receivable 2,295 (4,153) Adjusted EBITDA $ (355,383) $ (172,773) (1) For the years ended December 31, 2023 and 2022, includes $5.0 million and $10.3 million, respectively, in related employer payroll taxes.
A reconciliation of EBITDA and Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is presented below: Year Ended December 31, (in thousands) 2024 2023 Net loss (1) $ (547,029) $ (892,869) Interest income (38,612) (57,217) Interest expense 94 93 Income tax benefit (479) (71) Depreciation and amortization 63,020 70,507 EBITDA (523,006) (879,557) Stock-based compensation (2) 115,299 234,908 Impairment expense (3) 53,654 121,404 Restructuring charges (4) 24,172 — Merger and acquisition related expenses (5) 4,417 61,189 Loss on equity method investments — 2,635 Loss on investments 28,827 54,827 Loss on deconsolidation of subsidiaries 7,013 42,502 Change in fair value of warrant liabilities (5,701) (5,168) Change in fair value of convertible notes 2,014 2,295 Adjusted EBITDA $ (293,311) $ (364,965) (1) All periods include non-cash revenue when earned, including $45.4 million in the year ended December 31, 2024, recognized pursuant to the termination of revenue contracts with Motif.
Total stock-based compensation expense, inclusive of employer payroll taxes, was allocated as follows (in thousands): Year Ended December 31, 2023 2022 Research and development $ 148,861 $ 738,821 General and administrative 86,047 1,202,099 Total $ 234,908 $ 1,940,920 Cell Engineering Revenue Cell Engineering revenue remained relatively flat in 2023 compared to 2022, decreasing by $0.1 million.
Year Ended December 31, (in thousands) 2024 2023 Research and development $ 57,723 $ 148,861 General and administrative 57,576 86,047 Total $ 115,299 $ 234,908 Cell Engineering Revenue Cell Engineering revenue was $174.0 million in 2024, compared to $143.5 million in 2023, an increase of $30.4 million.
Our non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
In 2024, we updated our definition of Adjusted EBITDA to no longer exclude the impact of acquired in-process research and development expenses. Accordingly, the comparable 2023 period has been recast to conform to the revised definition. Our non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP performance measures.
The net change in operating assets and liabilities was primarily due to (i) a decrease in accounts receivable of $55.0 million from increased Biosecurity collections, partially offset by (ii) increase in prepaid expenses and other current assets of $8.5 million primarily due to prepaid insurance for directors and officers, (iii) decrease in accounts payable of $10.8 million due to timing of invoices, (iv) decrease in accrued expenses and other current liabilities of $39.6 million, (v) decrease in deferred revenue of $36.4 million, and (vi) lease incentives received of $13.2 million offset by (vii) $10.8 million decrease in operating lease liabilities from rent payments.
The net change in operating assets and liabilities was primarily driven by a $40.4 million decrease in accrued expenses and other current liabilities primarily due to the payment or release of restructuring-related accruals and litigation costs, a $68.6 million decrease in deferred revenue primarily from a one-time release of a deferred revenue balance associated with a terminated customer contract, and a $14.9 million decrease in operating lease liabilities from rent payments, partially offset by a $23.5 million decrease in operating lease right-of-use assets from lease incentives received and a $10.1 million decrease in prepaid expenses and other current assets, primarily driven by the derecognition of an insurance receivable and a reduction in contract renewals resulting from our restructuring actions.
We anticipate that our G&A expenses attributable to organic business activities will either remain consistent or decline in 2024 as compared to 2023, reflecting a stabilization in our operational overhead. Conversely, we intend to maintain a strategic and opportunistic approach regarding inorganic G&A expenses arising from mergers, acquisitions, and other non-organic growth initiatives.
We expect that our G&A expenses will either remain consistent or decline in 2025 as compared to 2024, reflecting the stabilization of our operational overhead and the impact of our restructuring actions. However, our G&A expenses could increase in 2025 due to employee incentive programs offered or additional costs and expenses arising from these restructuring actions.
Other Income (Expense), Net Other income (expense), net increased $1.5 million in 2023 compared to 2022 primarily due to a $6.6 million unfavorable change in fair value of notes receivable offset by a $6.0 million increase in sublease rent income from Zymergen subleases prior to deconsolidation and a $2.6 million decrease in loss on disposal of equipment.
Other Income, Net Other income, net was $3.9 million in 2024, compared to $9.1 million in 2023, a decrease of $5.3 million. This decrease was primarily due to reduced sublease rent income following the deconsolidation of Zymergen.
The impact of the modification on stock-based compensation expense has significantly diminished by the end of 2023. Impairment of Lease Assets Impairment of lease assets relates to impairment losses recognized on a right-of-use asset and the related leasehold improvements associated with a Zymergen facility that we exited in the third quarter of 2023.
Conversely, we intend to maintain a strategic and opportunistic approach regarding inorganic G&A expenses arising from mergers, acquisitions, and other inorganic growth initiatives. Impairment of Lease Assets Impairment of lease assets relates to impairment losses recognized on a right-of-use asset and the related leasehold improvements associated with exited leased facilities.
These arrangements are further described in Notes 5 , 6 , 16 and 20 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Our recent strategic business and asset acquisitions are described in detail in Note 4 of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Generating Economic Value Through Cell Programs Our cell engineering platform is a key enabling technology and source of intellectual property for our customers’ products.
In September 2023, Zymergen exited and ceased use of a leased facility which resulted in a $96.2 million impairment to reduce the carrying value of the right-of-use asset and the related leasehold improvements to their estimated fair value.
During 2023, Zymergen permanently ceased use of and vacated the leased space, which triggered an impairment analysis and resulted in a write-down of the carrying value of the assets to their estimated fair value. Goodwill Impairment In 2024, we recorded goodwill impairment expense of $47.9 million related to our Cell Engineering reporting unit, further discussed within “Critical Accounting Estimates” below.
Removed
Ginkgo is the leading horizontal platform for cell programming, providing flexible, end-to-end services that solve challenges for organizations across diverse markets, from food and agriculture to pharmaceuticals to industrial and specialty chemicals.
Added
Ginkgo sells services in two business segments: cell engineering, where we provide biological research and development (“R&D”) services for our customers across a range of industries, and biosecurity, where we provide services to government and commercial customers so they can work to identify, monitor, prevent, mitigate, and ultimately protect humanity from biological threats.
Removed
Ginkgo’s Biosecurity business is building a global infrastructure for biosecurity to empower governments, communities, and public health leaders to prevent, detect and respond to a wide variety of biological threats. We use our platform to program cells on behalf of our customers.
Added
Cell Engineering Ginkgo does not make end products; instead, we offer biological R&D services on our platform to enable our customers to bring their products to market. Historically, Ginkgo’s primary service offering has been end-to-end cell engineering R&D services ( solutions ).
Removed
These “cell programs” are designed to enable biological production of products as diverse as novel therapeutics, key food ingredients, and chemicals currently derived from petroleum. Biology did not evolve by end market. All of these applications run on cells which have a common code—DNA—and a common programming platform can enable all of them.
Added
In 2024, Ginkgo expanded its service offering to also include services that provide our customers cell engineering tools for biological R&D, which are intended to provide more targeted and bespoke resources to customers that continue to conduct in-house R&D.

… 174 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+3 added−0 removed0 unchanged
Biggest changeHowever, because of the short-term nature of the instruments in our portfolio, an immediate change in market interest rates of 100 basis points would not have a material impact on the fair market value of our cash and cash equivalents or on our financial position or results of operations. 90 Table of Contents Foreign Currency Exchange Rate Risk We are subject to foreign currency exchange rate risk from the translation of the financial statements of our foreign subsidiaries, whose financial condition and results of operations are reported in their local currencies and then translated into U.S. dollars at the applicable currency exchange rate for inclusion in our consolidated financial statements.
Biggest changeForeign Currency Exchange Rate Risk We are subject to foreign currency exchange rate risk from the translation of the financial statements of our foreign subsidiaries, whose financial condition and results of operations are reported in their local currencies and then translated into U.S. dollars at the applicable currency exchange rate for inclusion in our consolidated financial statements.
We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on operating results or financial condition. Inflation Risk Inflation generally affects us by increasing our cost of labor, laboratory supplies, consumables and equipment.
We do not believe that an immediate 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on operating results or financial condition. 79 Table of Contents Inflation Risk Inflation generally affects us by increasing our cost of labor, laboratory supplies, consumables and equipment.
We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2023 and 2022.
We do not believe that inflation had a material effect on our business, financial condition or results of operations during the years ended December 31, 2024 and 2023.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our cash equivalents are invested in short-term U.S. Treasury obligations.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We are exposed to market risk related to changes in interest rates. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our cash equivalents have historically been invested in short-term U.S.
Foreign currency translation gain (loss) was $4.1 million and $(0.9) million for the years ended December 31, 2023 and 2022, respectively. Foreign currency translation adjustments are accounted for as a component of accumulated other comprehensive loss within stockholders’ equity. Additionally, we have contracted with and may continue to contract with foreign vendors.
Foreign currency translation (loss) gain was $(4.8) million and $4.1 million for the years ended December 31, 2024 and 2023, respectively. Foreign currency translation adjustments are accounted for as a component of accumulated other comprehensive (loss) income within stockholders’ equity. Additionally, we have contracted with and may continue to contract with foreign customers, suppliers, and contractors.
Added
Treasury obligations. However, because of the short-term nature of the instruments in our portfolio as of December 31, 2024, an immediate change in market interest rates of 100 basis points would not have a material impact on the fair market value of our cash and cash equivalents or on our financial position or results of operations.
Added
In February 2025, we expanded our investment of excess cash and cash equivalents to include U.S. Treasuries, corporate papers and bonds, bank obligations and certificates, and other interest bearing securities, whereby no underlying security may have a term greater than two years and in which the entire portfolio would have weighted average maturity of six-months or less.
Added
An immediate change in market interest rates of 100 basis points on the new investments would not have a material impact on the fair market value of our cash and cash equivalents or on our financial position or results of operations.

Other DNA 10-K year-over-year comparisons