8-K: Ginkgo Bioworks Faces NYSE Delisting Threat After Share Price Falls Below $1

Ginkgo Bioworks has received a notice from the NYSE for non-compliance with listing standards due to its stock price falling below $1, triggering a six-month period to regain compliance.

Summary

• Ginkgo Bioworks received a notice from the New York Stock Exchange (NYSE) on May 7, 2024, stating that the company is not in compliance with Section 802.01C of the NYSE Listed Company Manual.
• This non-compliance is due to the average closing price of Ginkgo's Class A common stock being less than $1.00 per share over a consecutive 30 trading-day period.
• The notice does not immediately delist Ginkgo's stock from the NYSE.
• Ginkgo has a six-month period to regain compliance, which can be achieved if the stock price closes at or above $1.00 on the last trading day of any month during the cure period and maintains an average closing price of at least $1.00 over the preceding 30 trading days.
• If Ginkgo fails to regain compliance within the six-month period, the NYSE will initiate procedures to suspend and delist the company's stock.
• Ginkgo intends to regain compliance and is considering all available options to do so.
• The company will notify the NYSE of its intent to regain compliance within 10 business days of receiving the notice.
• During the cure period, Ginkgo's stock will continue to trade on the NYSE under the symbol DNA, but will have an added designation of '.BC' to indicate non-compliance.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the non-compliance notice and the risk of delisting, although the company is taking steps to address the issue. The situation creates uncertainty for investors.

Positives

• The notice does not result in immediate delisting of the company's stock.
• Ginkgo has a six-month period to regain compliance with the NYSE listing standards.
• The company intends to regain compliance and is considering all available options.

Negatives

• Ginkgo's stock price has fallen below the minimum $1.00 threshold required by the NYSE.
• The company is at risk of being delisted from the NYSE if it does not regain compliance within six months.
• The stock will trade with a '.BC' designation, indicating non-compliance.

Risks

• There is a risk that Ginkgo may not be able to regain compliance with the NYSE listing standards within the six-month cure period.
• Failure to regain compliance will lead to the suspension and delisting of the company's stock from the NYSE.
• The company's stock price may experience volatility due to the non-compliance notice.
• There are risks related to the company's ability to implement business plans and realize additional business opportunities.
• Downturns in demand for products using synthetic biology and uncertainty regarding demand for biosecurity services could impact the company.
• Changes in the biosecurity industry, including advancements in technology and emerging competition, pose risks.
• The outcome of any pending or potential legal proceedings against the company could have a negative impact.
• The company's ability to realize the expected benefits from its Foundry platform programs is uncertain.
• The success of the company's engineered cells, bioprocesses, data packages, or other deliverables is not guaranteed.
• The product development or commercialization success of the company's customers is also a risk factor.

Future Outlook

Ginkgo intends to regain compliance with NYSE's continued listing standards and is considering all available options to do so, but there is no guarantee of success.

Management Comments

• The Company intends to regain compliance with NYSE's continued listing standards and is considering all available options to do so.

Industry Context

This announcement highlights the challenges faced by companies in the synthetic biology and biosecurity sectors, where market sentiment and stock performance can be volatile. It also underscores the importance of maintaining compliance with exchange listing requirements.

Comparison to Industry Standards

• Other companies in the biotechnology sector, such as Amyris and Zymergen, have also faced challenges with stock performance and compliance with listing standards.
• The six-month cure period is a standard procedure for companies that fall below the minimum share price requirement on the NYSE.
• The '.BC' designation is a common indicator of non-compliance with listing standards.

Stakeholder Impact

• Shareholders face the risk of potential delisting and loss of investment value.
• Employees may experience uncertainty due to the company's financial challenges.
• Customers and suppliers may be concerned about the company's long-term viability.
• Creditors may be more cautious about extending credit to the company.

Next Steps

• Ginkgo will notify the NYSE of its intent to regain compliance within 10 business days of receiving the notice.
• The company will work to increase its stock price to at least $1.00 and maintain an average closing price of at least $1.00 over a 30-day period.
• Ginkgo will consider all available options to regain compliance.

Key Dates

Keywords

NYSE, delisting, compliance, stock price, Ginkgo Bioworks, DNA, listing standards, cure period, biosecurity, synthetic biology