What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-08 · 255 added, 199 removed, 585 unchanged (44% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

Current assets:

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Accumulated deficit ( 5,730,023 ) ( 5,290,528 )

Accumulated other comprehensive (loss) income ( 1,723 ) 1,484

Accumulated other comprehensive income 263 1,484

Total stockholders’ equity 797,943 1,097,152

4 unchanged sentences

(in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

11 unchanged sentences

General and administrative 52,292 82,028 188,864 295,802

Impairment of lease assets — 96,210 — 96,210

Goodwill impairment — — 47,858 —

6 unchanged sentences

Loss on investments ( 6,912 ) ( 36,324 ) ( 16,282 ) ( 44,815 )

Loss on deconsolidation of subsidiary ( 7,013 ) — ( 7,013 ) —

Change in fair value of warrant liabilities 1,528 1,891 5,701 ( 1,387 )

Other income (expense), net ( 766 ) 3,224 1,249 6,152

Total other income 5,954 10,903 18,076 21,761

Other income, net 1,572 2,893 2,821 9,045

Total other income (expense) ( 1,574 ) ( 16,520 ) 16,502 5,241

Loss before income taxes ( 56,778 ) ( 302,913 ) ( 439,649 ) ( 681,048 )

Income tax expense 190 67 221 149

Income tax expense (benefit) ( 375 ) ( 22 ) ( 154 ) 127

Net loss $ ( 56,403 ) $ ( 302,891 ) $ ( 439,495 ) $ ( 681,175 )

5 unchanged sentences

Net loss $ ( 56,403 ) $ ( 302,891 ) $ ( 439,495 ) $ ( 681,175 )

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustment 494 ( 1,599 ) ( 2,713 ) ( 267 )

Total other comprehensive (loss) income ( 172 ) 314 ( 3,207 ) 1,332

Reclassification of foreign currency translation adjustment realized upon sale of foreign subsidiary 1,492 — 1,492 —

Total other comprehensive income (loss) 1,986 ( 1,599 ) ( 1,221 ) ( 267 )

Comprehensive loss $ ( 54,417 ) $ ( 304,490 ) $ ( 440,716 ) $ ( 681,442 )

(1) Includes related party revenue of $ 5,146 and $ 6,507 for the three months ended June 30, 2024 and 2023, respectively, and $ 5,819 and $ 11,212 for the six months ended June 30, 2024 and 2023, respectively.

(1) Includes related party revenue of $ 46,659 and $ 8,727 for the three months ended September 30, 2024 and 2023, respectively, and $ 51,990 and $ 19,912 for the nine months ended September 30, 2024 and 2023, respectively.

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

2 unchanged sentences

(in thousands)

Three Months Ended June 30, 2024

Amount Additional

Three Months Ended September 30, 2024

Shares Amount Additional

Accumulated Deficit

Comprehensive

Income (Loss)

Stockholders’

Balance as of March 31, 2024 2,033,624 $ 202 $ 6,445,058 $ ( 5,456,439 ) $ ( 1,551 ) $ 987,270

Balance as of June 30, 2024 51,970 $ 5 $ 6,508,410 $ ( 5,673,620 ) $ ( 1,723 ) $ 833,072

Issuance of common stock upon exercise or vesting of equity awards 422 — — — — —

Settlement of contingent consideration 690 — 5,437 — — 5,437

Issuance of common stock for asset acquisitions 18,949 2 20,923 — — 20,925

Issuance of common stock in exchange for services 2,720 — 2,500 — — 2,500

Payment for fractional shares after reverse stock split — — ( 4 ) — — ( 4 )

Stock-based compensation expense — — 13,855 — — 13,855

Reclassification of foreign currency translation adjustment realized upon sale of foreign subsidiary — — — — 1,492 1,492

Foreign currency translation — — — — 494 494

Net loss — — — ( 56,403 ) — ( 56,403 )

Balance as of June 30, 2024 2,078,737 $ 206 $ 6,508,209 $ ( 5,673,620 ) $ ( 1,723 ) $ 833,072

Six Months Ended June 30, 2024

Amount Additional

Balance as of September 30, 2024 53,082 $ 5 $ 6,527,698 $ ( 5,730,023 ) $ 263 $ 797,943

Nine Months Ended September 30, 2024

Shares Amount Additional

Accumulated Deficit

Comprehensive

Income (Loss) Total

Stockholders’

1 unchanged sentence

Issuance of common stock upon exercise or vesting of equity awards 1,414 — 543 — — 543

Payment for fractional shares after reverse stock split — — ( 4 ) — — ( 4 )

Settlement of contingent consideration 764 — 9,884 — — 9,884

2 unchanged sentences

Stock-based compensation expense — — 91,783 — — 91,783

Reclassification of foreign currency translation adjustment realized upon sale of foreign subsidiary — — — — 1,492 1,492

Foreign currency translation — — — — ( 2,713 ) ( 2,713 )

Net loss — — — ( 439,495 ) — ( 439,495 )

Balance as of June 30, 2024 2,078,737 $ 206 $ 6,508,209 $ ( 5,673,620 ) $ ( 1,723 ) $ 833,072

Balance as of September 30, 2024 53,082 $ 5 $ 6,527,698 $ ( 5,730,023 ) $ 263 $ 797,943

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

2 unchanged sentences

(in thousands)

Three Months Ended June 30, 2023

Amount Additional

Accumulated Deficit

Three Months Ended September 30, 2023

Shares Amount Additional

Capital Accumulated Deficit

Comprehensive

Stockholders’

Balance as of March 31, 2023 1,933,880 $ 194 $ 6,211,634 $ ( 4,602,628 ) $ ( 1,614 ) $ 1,607,586

Balance as of June 30, 2023 48,869 $ 5 $ 6,280,823 $ ( 4,775,943 ) $ ( 1,300 ) $ 1,503,585

Issuance of common stock upon exercise or vesting of equity awards 440 — 55 — — 55

Tax withholdings related to net share settlement of equity awards ( 14 ) — ( 23 ) — — ( 23 )

Issuance of common stock for asset acquisitions 2,820 — 3,581 — — 3,581

Issuance of common stock in exchange for services 2,023 — 2,500 — — 2,500

Stock-based compensation expense and other — — 62,470 — — 62,470

Settlement of contingent consideration 11 — 960 — — 960

Stock-based compensation expense — — 52,573 — — 52,573

Foreign currency translation — — — — ( 1,599 ) ( 1,599 )

Net loss — — — ( 302,891 ) — ( 302,891 )

Balance as of June 30, 2023 1,954,704 $ 196 $ 6,280,632 $ ( 4,775,943 ) $ ( 1,300 ) $ 1,503,585

Six Months Ended June 30, 2023

Amount Additional

Accumulated Deficit

Balance as of September 30, 2023 49,320 $ 5 $ 6,334,411 $ ( 5,078,834 ) $ ( 2,899 ) $ 1,252,683

Nine Months Ended September 30, 2023

Shares Amount Additional

Capital Accumulated Deficit

Comprehensive

3 unchanged sentences

Tax withholdings related to net share settlement of equity awards — — ( 23 ) — — ( 23 )

Settlement of contingent consideration - restricted stock — — 2,262 — — 2,262

Settlement of contingent consideration 11 — 3,222 — — 3,222

Issuance of common stock for asset acquisitions 70 — 3,581 — — 3,581

3 unchanged sentences

Net loss — — — ( 681,175 ) — ( 681,175 )

Balance as of June 30, 2023 1,954,704 $ 196 $ 6,280,632 $ ( 4,775,943 ) $ ( 1,300 ) $ 1,503,585

Balance as of September 30, 2023 49,320 $ 5 $ 6,334,411 $ ( 5,078,834 ) $ ( 2,899 ) $ 1,252,683

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

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(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

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Loss on investments and equity method investments 16,282 46,331

Loss on deconsolidation of subsidiary 7,013 —

Change in fair value of warrant liabilities ( 5,701 ) 1,387

2 unchanged sentences

Non-cash in-process research and development 19,796 3,981

Impairment loss on assets held for sale — 9,001

Impairment of long-lived assets — 121,404

Other non-cash activity 655 3,053

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Business acquisition ( 5,400 ) —

Proceeds from sales of marketable securities 3,951 —

Proceeds from sale of equipment 591 3,000

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Interim results are not necessarily indicative of results for a full year.

Reverse Stock Split

On August 19, 2024 (the “Effective Date”), with the approval of the Company's board of directors and shareholders, the Company effected a one-for-forty (1:40) reverse stock split (the “Reverse Stock Split”) for the Company’s common stock (inclusive of Class A common stock, Class B common stock and Class C common stock, par value $0.0001 per share).

Accordingly, all common shares, common stock equity awards and common stock per share amounts presented herein have been retrospectively adjusted to reflect the Reverse Stock Split.

On the Effective Date, every forty shares of common stock issued and outstanding immediately prior to the Effective Date were automatically combined into one share of such class of common stock without any change to the par value per share.

The number of shares reserved under the Company’s equity plans and the number of shares underlying awards outstanding under the Company’s equity plans was reduced proportionately.

No fractional shares were issued in connection with the Reverse Stock Split.

Shareholders entitled to receive a fractional share as a result of the Reverse Stock Split received a cash payment in lieu of such fractional shares.

The number of authorized shares of common stock was not reduced.

In respect of the underlying common stock split, an adjustment to the exercise price of the Company’s warrants (the “Warrants”) and the number of shares of the Company’s Class A common stock issuable on exercise of each Warrant was adjusted in proportion to the Reverse Stock Split.

As of the effectiveness of the Reverse Stock Split, the exercise price to purchase one share of Class A common stock equals $ 460.00 ($ 11.50 per Warrant).

Each Warrant equals one-fortieth (1/40) of one share of Class A common stock ( 40 Warrants must be exercised for one share of Class A common stock).

No fractional shares of Class A common stock will be issued upon exercise of the Warrants;

therefore, a minimum of 40 Warrants must be exercised to receive any entitlement.

For the avoidance of doubt, no other amendment, modification, alteration or change was made to the terms of the Warrants as a result of the Reverse Stock Split.

Principles of Consolidation

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All intercompany accounts and transactions have been eliminated.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year presentation.

In the accompanying condensed consolidated statements of cash flows for the nine months ended September 31, 2023, (i) $ 0.9 million was reclassified from non-cash customer consideration to other non-cash activity and (ii) $ 0.1 million was reclassified from other financing activities to proceeds from exercise of stock options.

The total cash used in operating and financing activities for the nine months ended September 31, 2023 is not changed as a result of these reclassifications.

Use of Estimates

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Significant Accounting Policies

There have been no new or material changes to the Company’s significant accounting policies during the six months ended June 30, 2024 as compared to the significant accounting policies described in Note 2 to the Company's 2023 consolidated financial statements included in the Company's 2023 Annual Report on Form 10-K.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

There have been no new or material changes to the Company’s significant accounting policies during the nine months ended September 30, 2024 as compared to the significant accounting policies described in Note 2 to the Company's 2023 consolidated financial statements included in the Company's 2023 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

There were no new recently issued accounting pronouncements that are of significance or potential significance to the Company from those disclosed within Note 2 to the Company's 2023 consolidated financial statements included in the 2023 Annual Report on Form 10-K.

Acquisitions and Divestiture

On April 10, 2024, the Company acquired certain platform assets, including fully sequenced and isolated strains, unique gene sequences, relevant functional data and metadata, and a development pipeline from AgBiome, Inc.

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The total cash purchase price was $ 6.2 million, with $ 5.4 million paid at closing and $ 0.8 million released from escrow.

The allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date primarily includes $ 19.9 million of operating lease right-of-use assets, $ 6.0 million of property and equipment, and $ 19.9 million of operating lease liabilities.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date primarily includes $ 19.9 million of operating lease right-of-use assets, $ 6.0 million of property and equipment, and $ 19.9 million of operating lease liabilities.

No goodwill or intangible assets were recognized.

Transaction costs associated with the Zymergen APA were not material for the six months ended June 30, 2024.

Transaction costs associated with the Zymergen APA were not material for the nine months ended September 30, 2024.

Other Acquisitions

The Company completed three other asset acquisitions during the six months ended June 30, 2024.

The Company completed three other asset acquisitions during the nine months ended September 30, 2024.

The aggregate purchase price for the three acquisitions was $ 19.8 million and was paid with the issuance of 0.4 million shares of Ginkgo's Class A common stock.

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The assets acquired represent in-process research and development with no alternative future use.

Accordingly, the Company recorded $ 3.0 million and $ 19.8 million as acquired in-process research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2024, respectively.

Accordingly, the Company recorded $ 19.8 million as acquired in-process research and development expense in the accompanying condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2024.

On September 30, 2024, the Company sold the equity interests of its former subsidiary Altar SAS (“Altar”) for a nominal amount.

As a result of the sale, the Company deconsolidated all of Altar's assets and liabilities from its consolidated financial statements effective September 30, 2024, and recognized a loss on deconsolidation of $7.0 million in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024.

The loss on deconsolidation includes a $1.5 million reclassification of accumulated currency translation adjustments to earnings.

The sale did not meet the criteria to be reported as a discontinued operation.

Restructuring

In the three months ended June 30, 2024, in connection with the Company’s plans to reduce operational expenditures, management, with the approval of the Board of Directors, approved a restructuring plan.

This plan includes an expected reduction in labor expenses, primarily through a workforce reduction of at least 35 %, and a planned consolidation and sublease of certain facilities.

Initial workforce reductions commenced in June 2024, with further reductions expected in the second half of 2024.

All reductions are expected to be substantially completed in 2025, subject to compliance with

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

applicable laws.

The Company plans to consolidate certain facilities through various actions, including the consolidation of office and laboratory operations into fewer locations, subleasing unused facilities, and other related measures.

While the Company aims to complete the majority of its facility consolidation actions in 2025, the actual timing may vary.

In the second quarter of 2024, in connection with the Company’s plans to reduce operational expenditures, management, with the approval of the Board of Directors, approved a restructuring plan.

This plan includes an expected reduction in labor expenses, primarily through a workforce reduction of at least 35 %, and the planned consolidation and sublease of certain facilities.

Initial workforce reductions commenced in June 2024 and continued into the third quarter, with further reductions expected in the fourth quarter of 2024 and into 2025.

All reductions are expected to be substantially completed in 2025, subject to compliance with applicable laws.

The Company plans to consolidate certain facilities through various actions, including combining office and laboratory operations into fewer locations, subleasing unused facilities, and has taken or plans to take other related measures, such as the sale of its subsidiary, Altar, in the third quarter of 2024 (see Note 2 ).

While the Company aims to complete the majority of its facility consolidation actions in 2025, the actual timing may vary, especially for subleasing unused or underutilized facilities, which may extend beyond 2025 or may not occur prior to termination of such lease, depending on market conditions.

Additionally, restructuring expenses related to potential asset impairments or contract amendments or terminations for any facilities no longer in use or underutilized could be material.

The costs for the reduction in force are expected to range from $ 18.0 million to $ 22.0 million primarily in the Cell Engineering segment and consist of one-time cash severance and related costs.

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Additional charges may be incurred as the Company progresses its restructuring plan and such charges could be material.

During the three and six months ended June 30, 2024, the Company incurred $ 17.1 million in restructuring costs, which are recorded as “Restructuring charges” in the condensed consolidated statements of operations and comprehensive loss.

The following table presents details of expenses incurred including a summary of the changes in the accrued liability balance related to the restructuring activities, which is included in “Accounts payable” and “Accrued expenses and other current liabilities” in the accompanying condensed consolidated balance sheet as of June 30, 2024 (in thousands):

Employee Termination Costs and Other Impairment of Right-of-Use Asset (1)

Expenses incurred $ 12,243 $ 4,823 $ 17,066

Cash payments ( 489 )

Liability balance at June 30, 2024 $ 11,754

(1) Relates to a decision to sublease a certain facility in connection with the restructuring and reflects the excess of the right-of-use asset's carrying value over its fair value, which was determined based on estimates of future discounted cash flows and is classified as Level 3 in the fair value hierarchy.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents restructuring costs incurred during the periods presented, which are recorded as “Restructuring charges” in the condensed consolidated statements of operations and comprehensive loss (in thousands):

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Employee termination costs and other $ 2,949 $ 15,192

Impairment of right-of-use asset (1)

Total restructuring $ 2,949 $ 20,015

(1) Relates to a sublease of a facility in connection with the restructuring and reflects the excess of the right-of-use asset's carrying value over its fair value, which was determined based on estimates of future discounted cash flows and is classified as Level 3 in the fair value hierarchy.

Additionally, the Company recorded a $7.0 million loss on the sale and deconsolidation of Altar as a component of other income (expense) in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024.

The following table presents the change in the accrued liability balance related to the restructuring activities, which is included in “Accounts payable” and “Accrued expenses and other current liabilities” in the accompanying condensed consolidated balance sheet as of September 30, 2024 (in thousands):

Employee Termination Costs and Other

Expenses incurred $ 15,191

Cash payments ( 12,558 )

Liability balance at September 30, 2024 $ 2,633

Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands):

As of June 30, 2024

As of September 30, 2024

Classification Total Level 1 Level 2 Level 3

6 unchanged sentences

Total assets $ 630,334 $ 614,950 $ 12,213 $ 3,171

Public Warrants Warrant liabilities $ 1,035 $ 1,035 $ — $ —

Private Placement Warrants (3)

Warrant liabilities 493 — 120 373

Contingent consideration Accrued expenses and other current liabilities $ 10,296 $ — $ — $ 10,296

1 unchanged sentence

Total liabilities $ 15,264 $ — $ — $ 15,264

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

As of December 31, 2023

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(3) The fair value of Private Placement Warrants classified as Level 2 is equivalent to that of Public Warrants as the transfer of Private Placement Warrants to anyone other than the initial purchasers or any of their permitted transferees results in the Private Placement Warrants having substantially the same terms as the Public Warrants.

Transfers to and from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs.

During the nine months ended September 30, 2024, transfers from Level 2 to Level 1 occurred due to lapse of regulatory sales restrictions on marketable equity securities.

Additionally, during the nine months ended September 30, 2024, a portion of the Private Placement Warrants' estimated fair value was transferred from Level 3 to Level 2 as a result of the Private Placement Warrants having substantially the same terms as the Public Warrants when transferred to anyone other than the initial purchasers or their permitted transferees, leading the Company to determine their fair value to be equivalent to that of the Public Warrants.

There were no other transfers between Levels 1, 2, or 3 during the nine months ended September 30, 2024 or 2023.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Transfers to and from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs.

During the six months ended June 30, 2024, transfers from Level 2 to Level 1 occurred due to lapse of regulatory sales restrictions on marketable equity securities.

Additionally, as of June 30, 2024, a portion of the Private Placement Warrants' estimated fair value was transferred from Level 3 to Level 2 as a result of the Private Placement Warrants having substantially the same terms as the Public Warrants when transferred to anyone other than the initial purchasers or their permitted transferees, leading the Company to determine their fair value to be equivalent to that of the Public Warrants.

There were no other transfers between Levels 1, 2, or 3 during the six months ended June 30, 2024 or 2023.

The table below provides a reconciliation of the beginning and ending balances for assets and liabilities measured at fair value using Level 3 significant unobservable inputs for the nine months ended September 30 (in thousands):

Notes Receivable Private Placement Warrants Contingent Consideration

Balance at January 1, 2024 $ 14,129 $ 1,846 $ 24,274

Additions 1,377 — —

Change in fair value ( 1,859 ) ( 1,697 ) 3,698

Settlements and payments — — ( 12,708 )

Transfers to Level 2 — ( 149 ) —

Conversion to common stock ( 10,476 ) — —

Balance at September 30, 2024 $ 3,171 $ — $ 15,264

Balance at January 1, 2023 $ 7,660 $ 3,860 $ 24,473

Additions 4,106 — 1,397

Change in fair value ( 1,806 ) 336 10,217

Settlements and payments — — ( 4,761 )

Balance at September 30, 2023 $ 9,960 $ 4,196 $ 31,326

Notes Receivable

For all of its notes receivable, the Company has elected the fair value option, for which changes in fair value are recorded in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2024 and December 31, 2023, the Company held a senior secured note in the principal amount of $ 11.8 million and a convertible promissory note in the principal amount of $ 10.0 million, both issued by Bolt Threads, Inc.

For all of its notes receivable, the Company has elected the fair value option, for which changes in fair value are recorded in other income, net in the condensed consolidated statements of operations and comprehensive loss.

The Company's notes receivable consisted of a senior secured note in the principal amount of $ 11.8 million and a convertible promissory note in the principal amount of $ 10.0 million, both issued by Bolt Threads, Inc.

(“Bolt Threads”).

The senior secured note bears interest at 12 % per annum, is due December 31, 2027 and is included in other non-current assets at its estimated fair value.

The convertible promissory note bears interest at 8 % per annum, is convertible into equity securities of Bolt Threads upon a qualified financing, a non-qualified financing, or special purpose acquisition company transaction, at a conversion price based on certain conditions as defined in the note agreement, or is otherwise payable on demand any time after the maturity date of October 4, 2024.

The convertible promissory note is included in prepaid expenses and other current assets at its estimated fair value.

The convertible promissory note bore interest at 8 % per annum, was convertible into equity securities of Bolt Threads upon a qualified financing, a non-qualified financing, or special purpose acquisition company transaction, at a conversion price based on certain conditions as defined in the note agreement, or was otherwise payable on demand any time after the maturity date of October 4, 2024.

During the three months ended September 30, 2024, $10.5 million in principal and accrued interest on the convertible promissory note was converted into 2.7 million shares of Bolt Threads' common stock, which is classified as a marketable equity security.

The Company used the yield method to value the senior secured note.

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Under this method, future cash flows are evaluated under various payoff scenarios, probability-weighted, and discounted to present value.

The significant unobservable (Level 3) inputs used in the fair value measurement as of June 30, 2024, included scenario probabilities ranging from 20 % to 27 %, a discount rate of 15 %, and estimated time to event date of up to 2 years.

The significant unobservable (Level 3) inputs used in the fair value measurement as of September 30, 2024, included scenario probabilities ranging from 20 % to 27 %, a discount rate of 16 %, and estimated time to event date of up to two years .

The significant unobservable (Level 3) inputs used in the fair value measurement as of December 31, 2023, included scenario probabilities ranging from 5 % to 85 %, a discount rate of 17 % and estimated time to event date of one to two years .

Significant changes in these inputs could have resulted in a significantly lower or higher fair value measurement.

As of June 30, 2024, the convertible debt instruments had an unpaid principal balance of $ 22.7 million and a fair value of $ 13.2 million.

As of September 30, 2024, the convertible debt instruments had an unpaid principal balance of $ 13.1 million and a fair value of $ 3.2 million.

As of December 31, 2023, the convertible debt instruments had an unpaid principal balance of $ 21.0 million and a fair value of $ 14.1 million.

The following table provides a reconciliation of notes receivable measured at fair value using Level 3 significant unobservable inputs for the six months ended June 30 (in thousands):

Balance at January 1, $ 14,129 $ 7,660

Additions 665 3,137

Change in fair value ( 1,579 ) ( 1,489 )

Balance at June 30, $ 13,215 $ 9,308

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Warrant Liabilities

In connection with the Company's merger with Soaring Eagle Acquisition Corp.

(“SRNG”) on September 16, 2021, the Company assumed 34.5 million publicly-traded warrants (“Public Warrants”) and 17.3 million private placement warrants (the “Private Placement Warrants”) previously issued in connection with SRNG’s initial public offering.

The fair value of the Public Warrants is based on the observable quoted price of such warrants on the New York Stock Exchange (“NYSE”).

The fair value of the Private Placement Warrants is estimated using the Black-Scholes option pricing model, which is considered to be a Level 3 fair value measurement.

The primary unobservable input used in the valuation of the Private Placement Warrants is expected stock-price volatility.

The Company estimated the volatility of its Private Placement Warrants using a Monte-Carlo simulation of the redeemable Public Warrants that assumes optimal exercise of the Company's redemption option at the earliest possible date.

The risk-free interest rate is based on the U.S.

Treasury zero-coupon yield curve for a maturity similar to the expected remaining life of the warrants.

The expected life of the warrants is assumed to be equivalent to their remaining contractual term.

The dividend yield is based on the historical rate, which the Company anticipates remaining at zero.

The following table provides quantitative information regarding Level 3 inputs used in the recurring valuation of the Private Placement Warrants as of their measurement dates:

June 30, 2024 December 31, 2023

Exercise price $ 11.50 $ 11.50

Stock price $ 0.33 $ 1.69

Volatility 122.8 % 70.5 %

Term (in years) 2.21 2.71

Risk-free interest rate 4.70 % 4.01 %

The following table provides a reconciliation of the Private Placement Warrants measured at fair value using Level 3 significant unobservable inputs for the six months ended June 30 (in thousands):

Balance at January 1, $ 1,846 $ 3,860

Change in fair value ( 1,324 ) 1,175

Transfers to Level 2 ( 149 ) —

Balance at June 30, $ 373 $ 5,035

Contingent Consideration

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The Company can settle a majority of its contingent consideration liabilities in cash or shares of Class A common stock at the Company’s election with the remainder payable in cash.

During the six months ended June 30, 2024, the Company settled $ 5.4 million in contingent consideration liabilities through payment of $ 0.9 million in cash and vesting of 3.9 million shares of restricted stock valued at $ 4.4 million.

During the six months ended June 30, 2023, the Company settled $ 3.8 million in contingent consideration liability through payment of $ 1.5 million in cash and vesting of 1.2 million shares of restricted stock valued at $ 2.3 million.

During the nine months ended September 30, 2024, the Company settled $ 12.7 million in contingent consideration liabilities through payment of $ 2.8 million in cash and vesting of 0.8 million shares of restricted stock valued at $ 9.9 million.

During the nine months ended September 30, 2023, the Company settled $ 4.8 million in contingent consideration liability through payment of $ 1.5 million in cash and vesting of 1.6 million shares of restricted stock valued at $ 3.2 million.

Of that amount, $ 1.4 million was recorded as an increase to the acquired intangible asset with an offset to additional paid-in-capital as the contingent consideration liability was deemed not probable of occurring.

The fair value of contingent consideration related to earnout payments from acquisitions was estimated using unobservable (Level 3) inputs as illustrated in the table below.

The fair value of contingent consideration related to restricted stock was

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

estimated using the quoted price of Ginkgo's Class A common stock, an estimate of the number of shares expected to vest, probability of vesting, and a discount rate.

The fair value of contingent consideration related to restricted stock was estimated using the quoted price of Ginkgo's Class A common stock, an estimate of the number of shares expected to vest, probability of vesting, and a discount rate.

Material increases or decreases in these inputs could result in a higher or lower fair value measurement.

1 unchanged sentence

The following table provides quantitative information regarding Level 3 inputs used in the fair value measurements of contingent consideration liabilities as of the periods presented:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Contingent Consideration Liability Valuation Technique Unobservable Input Range Range

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Discount rate 10.6 % 10.3 %

The following table provides a reconciliation of the contingent consideration measured at fair value using Level 3 significant unobservable inputs (in thousands):

Balance at January 1, $ 24,273 $ 24,473

Change in fair value 2,284 8,453

Settlements and payments ( 5,363 ) ( 2,364 )

Balance at June 30, $ 21,194 $ 30,562

Nonrecurring Fair Value Measurements

The Company measures the fair value of certain assets, including investments in privately held companies without readily determinable fair values, on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable and when observable price changes occur for the identical or similar security of the same issuer.

The Company measures the fair value of certain assets, including investments in privately held companies without readily determinable fair values, on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable, or when observable price changes occur for identical or similar securities from the same issuer.

The fair value of non-marketable equity securities is classified within Level 3 in the fair value hierarchy when the Company estimates fair value using unobservable inputs to measure the amount of the impairment loss.

The fair value of non-marketable equity securities is classified within Level 2 in the fair value hierarchy when the Company estimates fair value using the observable transaction price paid by third party investors for the identical or similar security of the same issuer.

During the three months ended June 30, 2024, the Company recorded a $ 4.9 million impairment loss related to its investment in Genomatica preferred stock.

During the nine months ended September 30, 2024, the Company recorded a $ 4.9 million impairment loss related to its investment in Genomatica preferred stock.

The fair value measurement was determined using the guideline public company method under the market approach.

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The fair value measurement is classified as Level 3 in the fair value hierarchy.

During the six months ended June 30, 2023, the Company received a total purchase amount of $ 11.0 million in Simple Agreement for Future Equity (“SAFEs”) from customers as prepayment for Cell Engineering services.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

During the nine months ended September 30, 2023, the Company received a total purchase amount of $ 11.0 million in Simple Agreement for Future Equity (“SAFEs”) from customers as prepayment for Cell Engineering services.

The Company used a scenario-based method to value the SAFEs as of each contract inception date, which resulted in total fair value of $ 4.5 million.

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The significant unobservable (Level 3) inputs used in the fair value measurement were scenario probabilities of 20 % to 60 %, a discount rate of 14 % and estimated time to event date of one to two years .

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

The Company recorded impairment losses of zero and $ 1.8 million related to SAFEs during the three months ended June 30, 2024 and 2023, respectively, and $ 5.2 million and $ 1.8 million during the six months ended June 30, 2024 and 2023, respectively.

The Company recorded impairment losses of $5.2 million and $1.8 million related to SAFEs during the nine months ended September 30, 2024 and 2023, respectively.

The fair value was generally estimated using the scenario-based method, where various payout scenarios were probability-weighted and discounted to present value.

Investments and Equity Method Investments

The Company partners with other investors to form business ventures, including Motif FoodWorks, Inc.

The Company has partnered with other investors to form business ventures, including Motif FoodWorks, Inc.

(“Motif”), Allonnia, LLC (“Allonnia”), Arcaea, LLC (“Arcaea”), Verb Biotics, LLC (“Verb”), BiomEdit, LLC (“BiomEdit”) and Ayana Bio, LLC (“Ayana”) (collectively “Platform Ventures”).

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The Company initially records SAFEs at fair value (see Note 4 ) and adjusts the carrying amount of the instrument at each reporting period for any impairments.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Investments consisted of the following (in thousands):

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

SAFEs $ 18,686 $ 23,898

5 unchanged sentences

Total $ 62,103 $ 78,565

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Loss on investments and equity method investments consisted of the following (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Marketable equity securities ( 6,906 ) 460 ( 4,771 ) ( 3,286 )

Non-marketable equity securities — ( 1,628 ) — ( 1,628 )

SAFEs — — ( 5,212 ) ( 1,811 )

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The components of loss on investments for each period were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Impairment charges $ — $ ( 33,000 ) $ ( 10,112 ) $ ( 34,811 )

Ongoing mark-to-market adjustments on marketable equity securities ( 1,926 ) ( 2,121 ) 742 ( 6,680 )

Realized and unrealized losses recognized on marketable equity securities ( 6,912 ) ( 1,696 ) ( 6,170 ) ( 8,376 )

Downward adjustments from observable price changes — ( 1,628 ) — ( 1,628 )

Total loss on investments $ ( 6,912 ) $ ( 36,324 ) $ ( 16,282 ) $ ( 44,815 )

The carrying value for non-marketable equity securities accounted for using the fair value measurement alternative and held as of June 30, 2024, including cumulative unrealized losses, were as follows (in thousands):

As of June 30, 2024

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Total realized and unrealized gains and losses associated with equity investments accounted for at fair value or the fair value measurement alternative consisted of the following (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net realized loss recognized on equity investments sold (1)

$ ( 844 ) $ — $ ( 844 ) $ —

Net unrealized losses recognized on equity investments held as of the end of the period ( 6,068 ) ( 36,324 ) ( 15,438 ) ( 44,815 )

Total loss on investments $ ( 6,912 ) $ ( 36,324 ) $ ( 16,282 ) $ ( 44,815 )

(1) Reflects the difference between the sale proceeds and the carrying value of the equity investments at the beginning of the period or the acquisition date, if later.

The carrying value of non-marketable equity securities accounted for using the fair value measurement alternative and still held as of September 30, 2024, including cumulative unrealized losses, were as follows (in thousands):

As of September 30, 2024

Total initial cost $ 107,996

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As the Company’s involvement in the Unconsolidated VIEs does not give it the power to control the decisions with respect to their development or other activities, which are their most significant activities, the Company has concluded that it is not the primary beneficiary of the Unconsolidated VIEs.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Additionally, the Company holds equity interests in certain privately-held companies that are not consolidated as the Company is not the primary beneficiary.

As of June 30, 2024 and December 31, 2023, the maximum risk of loss related to the Company’s VIEs was limited to the carrying value of its investments in such entities.

As of September 30, 2024 and December 31, 2023, the maximum risk of loss related to the Company’s VIEs was limited to the carrying value of its investments in such entities.

Refer to Note 5 for additional details on the Company’s investments and equity method investments.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Supplemental Financial Information

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The reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheet to the totals shown within the condensed consolidated statement of cash flows is as follows (in thousands):

As of June 30, 2024 As of June 30, 2023

As of September 30, 2024 As of September 30, 2023

Cash and cash equivalents $ 616,214 $ 1,049,244

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The following table presents non-cash investing and financing activities (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental disclosure of non-cash investing and financing activities:

7 unchanged sentences

Convertible financial instruments received for Cell Engineering services — 5,595

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Conversion of notes receivable for common stock 10,476 —

Property, Plant, and Equipment, net

Property, plant, and equipment, net consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Lab equipment $ 150,183 $ 147,185

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Property, plant, and equipment, net $ 211,035 $ 188,193

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Operating Lease

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Base rent during the first lease year is approximately $ 21.1 million and is subject to annual increases of 3 % thereafter.

Exit of a Leased Facility

In September 2023, the Company’s former subsidiary, Zymergen, ceased the use of and exited a leased facility consisting of approximately 300,000 square feet of office and laboratory space in Emeryville, California.

The facility was used pursuant to an operating lease with a minimum term expiring in August 2033.

Zymergen's exit resulted in an impairment loss of $ 96.2 million, including $ 36.6 million for the right-of-use asset and $ 59.6 million for the related leasehold improvements.

The impairment loss represents the amount by which the carrying value of the assets exceed their estimated fair values as of September 30, 2023, as determined using a discounted cash flow model under the income approach.

The fair value measurements are based on significant inputs not observable in the market and therefore represent Level 3 fair value measurements.

The key inputs used in the valuation were estimated sublease rental income and a discount rate of 8.5 %.

The impairments are presented as impairment of lease assets in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2023.

Capitalization

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Authorized Issued Outstanding

Common stock as of June 30, 2024:

Common stock as of September 30, 2024:

Class A 10,500,000 44,256 41,371

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15,800,000 53,475 50,032

On April 3, 2023, the Company issued 0.1 million shares of its Class A common stock as purchase consideration for the acquisition of certain intellectual property assets of StrideBio, Inc.

Refer to Note 2 , Acquisitions, for shares of common stock issued related to fiscal 2024 acquisitions.

On May 9, 2023, the Company issued 0.1 million shares of Class A common stock, valued at $ 2.5 million, as settlement for an employee retention milestone related to the FGen AG business acquisition.

An additional 0.1 million shares, valued at $ 2.5 million, were issued on April 26, 2024 for the final milestone payable in connection with that acquisition.

Refer to Note 10 , Stock-Based Compensation, for a summary of shares of common stock issued in connection with the Company’s equity incentive plans.

Ginkgo Bioworks Holdings, Inc.

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All goodwill is allocated to the Cell Engineering reporting unit and segment identified in Note 12 .

During the three months ended June 30, 2024, due to a sustained decrease in the market price of the Company's Class A common stock and market capitalization, the Company identified that an indicator of impairment was present as of June 30, 2024.

Due to a sustained decrease in the market price of the Company's Class A common stock and market capitalization, the Company identified that an indicator of impairment was present as of June 30, 2024.

As such, the Company completed a quantitative impairment test related to its Cell Engineering reporting unit.

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The result of the interim impairment test indicated that the estimated fair value of the reporting unit was less than its carrying value.

As a result, the Company recorded a $ 47.9 million goodwill impairment charge during the three and six months ended June 30, 2024.

As a result, the Company recorded a $ 47.9 million goodwill impairment charge during the nine months ended September 30, 2024.

Changes in the carrying amount of goodwill consisted of the following (in thousands):

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Impact of foreign currency translation ( 1,380 )

Balance as of June 30, 2024 $ —

Balance as of September 30, 2024 $ —

Intangible assets, net consisted of the following (in thousands):

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Amortization Period

June 30, 2024:

September 30, 2024:

Developed technology (2)

$ 114,272 $ ( 34,706 ) $ 79,566 6.8

Customer relationships 380 ( 380 ) — 0.0

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(1) The gross carrying value and accumulated amortization balances include the impact of cumulative foreign currency translation adjustments.

During the three months ended June 30, 2024, in connection with the acquisition of AgBiome, the Company acquired developed technology with an aggregate fair value of $ 18.2 million and an estimated useful life of three years .

(2) During the third quarter of 2024, the Company deconsolidated $ 8.3 million of developed technology intangible assets related to the deconsolidation of Altar (see Note 2 ).

In the second quarter of 2024, in connection with the acquisition of AgBiome, the Company acquired developed technology with an aggregate fair value of $ 18.2 million and an estimated useful life of three years .

For further information, see Note 2 .

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Notes to Condensed Consolidated Financial Statements

Amortization expense was $ 4.9 million and $ 4.0 million for the three months ended June 30, 2024 and 2023, respectively, and $ 8.4 million and $ 8.3 million for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, estimated future amortization expense for identifiable intangible assets is as follows (in thousands):

Amortization expense was $ 4.9 million and $ 4.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 13.3 million and $ 12.2 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, estimated future amortization expense for identifiable intangible assets is as follows (in thousands):

Remainder of 2024 $ 4,771

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The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statement of operations and comprehensive loss for the periods presented (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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The Company grants stock-based incentive awards pursuant to the 2021 Incentive Award Plan (the “2021 Plan”) and the 2022 Inducement Plan (the “2022 Inducement Plan”).

As of June 30, 2024, there were approximately 147.1 million shares and 3.1 million shares available for future issuance under the 2021 Plan and 2022 Inducement Plan, respectively.

As of September 30, 2024, there were approximately 4.6 million shares and 0.1 million shares available for future issuance under the 2021 Plan and 2022 Inducement Plan, respectively.

Ginkgo Bioworks Holdings, Inc.

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Time-based Stock Options

A summary of stock option activity for options that are subject to time-based vesting conditions for the six months ended June 30, 2024, is presented below:

A summary of stock option activity for options that are subject to time-based vesting conditions for the nine months ended September 30, 2024, is presented below:

(in thousands)

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Forfeited ( 14 ) 136.79

Outstanding as of June 30, 2024 8,176 0.98 9.05 $ —

Exercisable as of June 30, 2024 1,829 2.59 6.03 —

Outstanding as of September 30, 2024 191 32.73 9.44 $ —

Exercisable as of September 30, 2024 34 94.75 8.25 —

(1) The aggregate intrinsic value is calculated as the difference between the Company's closing stock price on the last trading day of the quarter and the exercise prices, multiplied by the number of in-the-money stock options.

The aggregate intrinsic value of options exercised during the six months ended June 30, 2024 and 2023 was $ 1.3 million and $ 2.9 million, respectively.

The weighted-average grant-date fair value of options granted during the six months ended June 30, 2024 and 2023 was $ 0.35 and $ 1.43 per share, respectively, and was calculated using the following key assumptions in the Black-Scholes option-pricing model:

Six Months Ended June 30,

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2024 and 2023 was $ 0.7 million and $ 8.4 million, respectively.

The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2024 and 2023 was $ 14.14 and $ 57.20 per share, respectively, and was calculated using the following key assumptions in the Black-Scholes option-pricing model:

Nine Months Ended September 30,

Risk-free interest rate 4.24 % 3.94 %

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Dividend yield — % — %

As of June 30, 2024, there was $ 2.3 million of unrecognized compensation expense related to time-based stock options recognizable over a weighted-average period of 1.7 years.

As of September 30, 2024, there was $ 1.8 million of unrecognized compensation expense related to time-based stock options recognizable over a weighted-average period of 1.6 years.

Market-based Stock Options

In April 2024, the Company granted to each of the Company's four founders an option to purchase in aggregate 0.1 million shares of Ginkgo's Class A common stock with an exercise price of $ 100.00 per share, subject both to time-based and market-based vesting criteria (the “Founder Options”).

The market-based vesting is tied to the achievement of four specified stock price hurdles within a five-year period, with 10 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 5.00 , 10 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 7.50 , 20 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 10.00 and the remaining 60 % of the Founder Options vesting based on the achievement of a 90-

The market-based vesting is tied to the achievement of four specified stock price hurdles within a five-year period, with 10 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 200.00 , 10 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 300.00 , 20 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 400.00 and the remaining 60 % of the Founder Options vesting based on the achievement of a 90-calendar-day average stock price of $ 500.00 .

If the market-based criteria are achieved during the five-year period, the awards will vest on the five-year anniversary of the grant date.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

calendar-day average stock price of $ 12.50 .

If the market-based criteria are achieved during the five-year period, the awards will vest on the five-year anniversary of the grant date.

The weighted-average grant-date fair value of the options granted was $ 7.80 per share and was calculated using a Monte Carlo simulation model with the following assumptions:

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Risk-free interest rate 4.65 %

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Dividend yield — %

As of June 30, 2024, there was $ 3.8 million of unrecognized compensation expense related to the market-based stock options recognizable over a weighted-average period of 4.8 years.

As of September 30, 2024, there was $ 3.6 million of unrecognized compensation expense related to the market-based stock options recognizable over a weighted-average period of 4.6 years.

Restricted Stock Units

A summary of the restricted stock units (“RSU”) activity for the six months ended June 30, 2024 is presented below:

A summary of the restricted stock units (“RSU”) activity for the nine months ended September 30, 2024 is presented below:

(in thousands) Weighted

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Forfeited ( 1,425 ) 84.45

Nonvested as of June 30, 2024 219,177 2.07

The weighted average grant date fair value of RSUs granted during the six months ended June 30, 2024 and 2023 was $ 1.18 and $ 1.32 , respectively.

As of June 30, 2024, there was $ 360.8 million of unrecognized compensation expense related to RSUs recognizable over a weighted-average period of 2.9 years.

Nonvested as of September 30, 2024 4,078 74.44

The weighted average grant date fair value of RSUs granted during the nine months ended September 30, 2024 and 2023 was $ 44.73 and $ 55.20 , respectively.

As of September 30, 2024, there was $ 241.1 million of unrecognized compensation expense related to RSUs recognizable over a weighted-average period of 2.8 years.

Earnout shares represent equity awards in the form of RSUs and restricted stock awards (“RSAs”) that were granted to existing shareholders of the Company as of the closing date of the Company's merger with SRNG on September 16, 2021 (the “Closing Date”).

The earnout shares are subject to the same time vesting and performance conditions (change in control or an initial public offering) as the underlying awards (including with respect to vesting and termination-related provisions).

Additionally, the earnout shares are subject to a market condition that will be met when the trading price of the Company's common stock is greater than or equal to $ 12.50 , $ 15.00 , $ 17.50 and $ 20.00 for any 20 trading days within any period of 30 consecutive trading days, on or before the fifth anniversary of the Closing Date (collectively, the “Earnout Targets”).

Additionally, the earnout shares are subject to a market condition that will be met when the trading price of the Company's Class A common stock is greater than or equal to $ 500.00 , $ 600.00 , $ 700.00 and $ 800.00 for any 20 trading days within any period of 30 consecutive trading days, on or before the fifth anniversary of the Closing Date (collectively, the “Earnout Targets”).

The first Earnout Target of $ 500.00 per share was met on November 15, 2021.

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Notes to Condensed Consolidated Financial Statements

A summary of activity during the six months ended June 30, 2024 for the earnout shares is presented below:

A summary of activity during the nine months ended September 30, 2024 for the earnout shares is presented below:

(in thousands)

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Forfeited ( 2 ) 516.15

Nonvested as of June 30, 2024 22,390 12.77

As of June 30, 2024, there was $ 2.3 million of unrecognized compensation expense related to earnout shares recognizable over a weighted-average period of 0.8 years.

Nonvested as of September 30, 2024 555 510.85

As of September 30, 2024, there was $ 0.4 million of unrecognized compensation expense related to earnout shares recognizable over a weighted-average period of 0.7 years.

Revenue Recognition

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The following table sets forth the percentage of Cell Engineering revenues by industry based on total Cell Engineering revenue:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Government and defense 25 % 4 % 21 % 5 %

Agriculture 23 20 25 23

Food and nutrition 64 % 24 % 39 % 17 %

Pharma and biotech 14 30 19 33

Consumer and technology 15 14 9 12

Agriculture 11 22 18 23

Government and defense 7 6 14 5

Industrial and environment 3 16 6 13

Food and nutrition 4 11 10 13

Consumer and technology 1 2 4 9

Total Cell Engineering revenue 100 % 100 % 100 % 100 %

For both the three months ended June 30, 2024 and 2023, the Company’s revenue from customers within the United States comprised 84 % of total revenue.

For the six months ended June 30, 2024 and 2023, the Company's revenue from customers within the United States comprised 79 % and 84 %, respectively, of total revenue.

For the three months ended September 30, 2024 and 2023, the Company’s revenue from customers within the United States comprised 89 % and 81 %, respectively, of total revenue.

For the nine months ended September 30, 2024 and 2023, the Company's revenue from customers within the United States comprised 84 % and 83 %, respectively, of total revenue.

Contract Balances

The Company recognizes a contract asset when the Company transfers goods or services to a customer before the customer pays consideration or before payment is due, excluding any amounts presented as accounts receivable.

The Company had no contract asset balances as of June 30, 2024 and December 31, 2023.

The Company had no contract asset balances as of September 30, 2024 and December 31, 2023.

The Company's accounts receivable consists of both billed and unbilled amounts.

Unbilled receivables arise when revenue is recognized in excess of invoiced amounts and represent the Company’s unconditional right to consideration for goods or services already transferred to the customer.

The balance of unbilled accounts receivable, included in accounts receivable, net in the accompanying condensed consolidated balance sheets, was $ 10.8 million and $ 9.1 million as of June 30, 2024 and December 31, 2023, respectively.

The balance of unbilled accounts receivable, included in accounts receivable, net in the accompanying condensed consolidated balance sheets, was $ 8.1 million and $ 9.1 million as of September 30, 2024 and December 31, 2023, respectively.

Contract liabilities, or deferred revenue, primarily consist of payments received in advance of performance under the contract or when the Company has an unconditional right to consideration under the terms of the contract before it transfers goods or services to the customer.

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Contract liabilities are recognized as revenue as (or when) the Company performs under the contract.

During the six months ended June 30, 2024, the Company recognized $ 29.4 million of revenue that was included in the contract liabilities balance of $ 202.5 million as of December 31, 2023.

During the six months ended June 30, 2023, the Company recognized $ 44.1 million of revenue that was included in the contract liabilities balance of $ 222.6 million as of December 31, 2022.

During the nine months ended September 30, 2024, the Company recognized $ 84.3 million of revenue that was included in the contract liabilities balance of $ 202.5 million as of December 31, 2023.

During the nine months ended September 30, 2023, the Company recognized $ 59.8 million of revenue that was included in the contract liabilities balance of $ 222.6 million as of December 31, 2022.

Performance Obligations

The aggregate amount of the transaction price that was allocated to performance obligations that have not yet been satisfied or are partially satisfied as of June 30, 2024 and December 31, 2023 was $ 76.8 million and $ 110.0 million, respectively.

The aggregate amount of the transaction price that was allocated to performance obligations that have not yet been satisfied or are partially satisfied as of September 30, 2024 and December 31, 2023 was $ 68.0 million and $ 110.0 million, respectively.

The Company has elected the practical expedient not to provide the remaining performance obligation disclosures related to contracts for which the Company recognizes revenue on a cost-plus basis in the amount to which it has the right to invoice, and for contracts with a term of one year or less.

As of June 30, 2024, of the performance obligations not yet satisfied or partially satisfied, nearly all is expected to be recognized as revenue during the years 2024 to 2027.

As of September 30, 2024, of the performance obligations not yet satisfied or partially satisfied, nearly all is expected to be recognized as revenue during the years 2024 to 2029.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Segment Information

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The Company’s measure of segment operating results for management reporting purposes excludes the impact of stock-based compensation expense, depreciation and amortization, asset impairment charges, restructuring charges, and change in fair value of certain contingent liabilities.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents summary results of the Company’s reportable segments for the periods indicated (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Loss from operations $ ( 55,204 ) $ ( 286,393 ) $ ( 456,151 ) $ ( 686,289 )

(1) Includes $ 1.1 million and $ 1.0 million in employer payroll taxes for the three months ended June 30, 2024 and 2023, respectively, and $ 2.7 million and $ 3.2 million in employer payroll taxes for the six months ended June 30, 2024 and 2023, respectively.

(2) Includes $ 47.9 million related to goodwill impairment in the three and six months ended June 30, 2024 and $ 9.0 million related to impairment of lab equipment acquired as part of the Zymergen acquisition in the three and six months ended June 30, 2023.

(1) Includes $ 0.2 million and $ 1.1 million in employer payroll taxes for the three months ended September 30, 2024 and 2023, respectively, and $ 2.9 million and $ 4.3 million in employer payroll taxes for the nine months ended September 30, 2024 and 2023, respectively.

(2) For 2024, includes $ 47.9 million related to goodwill impairment.

For the three months ended September 30, 2023, includes a $ 16.2 million impairment loss on lab equipment and a $96.2 million impairment loss on an operating lease right-of-use asset and related leasehold improvements associated with an exited Zymergen leased facility.

For the nine months ended September 30, 2023, includes a $ 25.2 million impairment loss on lab equipment and a $96.2 million impairment loss on lease assets associated with the exited Zymergen leased facility.

(3) See Note 3 , Restructuring, for composition of costs.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Net Loss per Share

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The calculation of basic and diluted earnings per common share are as follows (in thousands, except per share amounts):

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

6 unchanged sentences

Weighted average common shares outstanding, diluted 52,246 48,770 51,250 48,330

Basic net loss per share $ ( 0.11 ) $ ( 0.09 ) $ ( 0.19 ) $ ( 0.20 )

Diluted net loss per share $ ( 0.11 ) $ ( 0.09 ) $ ( 0.19 ) $ ( 0.20 )

Basic and diluted net loss per share $ ( 1.08 ) $ ( 6.21 ) $ ( 8.58 ) $ ( 14.09 )

The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share for the periods presented because including them would have been anti-dilutive (in thousands):

As of June 30, 2024 As of June 30, 2023

Unvested RSUs 219,177 184,236

Earnout shares (1)

152,021 152,318

As of September 30, 2024 As of September 30, 2023

Warrants to purchase Class A common stock (1)

51,825 51,825

Outstanding stock options 691 211

Unvested RSUs 4,078 4,219

Earnout shares (2)

Escrow shares (3)

60,416 60,063

(1) In connection with the Company's merger with Soaring Eagle Acquisition Corp.

(“SRNG”) on September 16, 2021, the Company assumed 34.5 million formerly publicly traded warrants (“Public Warrants”) and 17.3 million private placement warrants (the “Private Placement Warrants”), initially issued in connection with SRNG’s initial public offering.

Each Warrant equals one-fortieth (1/40) of one share of Class A common stock (40 Warrants must be exercised for one share of Class A common stock).

(2) Represents earnout shares for which the service-based and/or market-based vesting conditions have not been satisfied.

(3) Represents restricted common stock issued in connection with asset acquisitions, held in escrow for indemnification purposes, and subject to forfeiture.

Related Parties

The Company’s significant transactions with its related parties are primarily comprised of revenue generating activities under collaboration and license agreements.

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

Related Parties

The Company’s significant transactions with its related parties are primarily comprised of revenue generating activities under collaboration and license agreements.

Significant related party transactions included in the condensed consolidated balance sheet are summarized below (in thousands):

As of June 30, 2024 As of December 31, 2023

As of September 30, 2024 As of December 31, 2023

Deferred revenue, current and non-current:

Motif FoodWorks $ 45,511 $ 45,426

Allonnia $ 36,397 $ 36,062

2 unchanged sentences

Genomatica 1,099 2,018

Motif FoodWorks — 45,426

Ayana Bio — 56

2 unchanged sentences

Significant related party transactions included in the condensed consolidated statement of operations and comprehensive loss are summarized below (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Cell Engineering revenue:

Motif FoodWorks $ 45,426 $ 6,303 $ 45,445 $ 6,306

Allonnia 391 180 77 425

Genomatica 337 1,011 919 2,999

BiomEdit 268 632 70 2,410

Ayana Bio 237 326 687 961

Allonnia — 159 — 245

Motif FoodWorks — 2 19 3

Arcaea — — 4,653 5,669

BiomEdit — 869 — 1,777

Verb Biotics — 70 — 588

1 unchanged sentence

$ 46,659 $ 8,727 $ 51,990 $ 19,912

Motif FoodWorks

In September 2018, the Company entered into (i) an Intellectual Property Contribution Agreement (“IPCA”) with Motif that granted Motif a license to certain of the Company’s intellectual property and (ii) a Technical Development Agreement (“TDA”) that established the terms under which the Company was to provide technical development services.

In return for the Company's contribution of intellectual property and access to its platform, the Company received shares of common stock in Motif.

The initial fair value of the common stock investment in Motif was $65.1 million, which has subsequently been reduced to a carrying value of zero as a result of the allocation of losses under the accounting for equity method investments.

The initial non-refundable fair value of the equity received, totaling $65.1 million and considered non-cash consideration under ASC 606, was accounted for as material rights under ASC 606.

The material rights pertained to Motif's license rights for a set of ingredients that the parties intended to develop within the first two years.

This amount was recorded as deferred revenue for the future license rights and recognizable as revenue as the Company performed qualifying services for Motif, or when such rights expire upon termination of the agreements.

As of December 31, 2023, the Company had a remaining

Ginkgo Bioworks Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

deferred revenue balance of $45.4 million with Motif under this arrangement.

Effective in August 2024, the Motif IPCA and the TDA agreements were mutually terminated with no adjustment to the original consideration.

As a result, the Company has no further obligation to perform services for Motif and, accordingly, the remaining $45.4 million in deferred revenue under this arrangement has been recognized in full as revenue in the three and nine months ended September 30, 2024.

Refer to Note 5 for additional details on the Company’s investments and equity method investments held in its related parties.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements