Ginkgo Bioworks Holdings (DNA) risk factors, FY2025 10-K

Risks Related to Ginkgo’s Business

1. 01We have a history of net losses. We expect to continue to incur losses for the foreseeable future, and we may never achieve or maintain profitability100% rewritten
2. 02We may need substantial additional capital in the future in order to fund our business
3. 03We have experienced periods of significant organizational change and if we fail to effectively manage these changes, then our business, results of operations, and financial condition could be adversely affected
4. 04Our limited operating history and evolving business makes it difficult to evaluate our current business and future prospects
5. 05Uncertainty regarding the demand for biosecurity services could materially adversely affect our business29% rewritten
6. 06We are or could become involved in securities or shareholder litigation and other related matters, which could be expensive and time-consuming. Such litigation and related matters could harm our business
7. 07If we cannot attract new customers, retain existing customers, and expand our relationships across both our cell engineering solutions and tools businesses, our business, financial condition, and results of operations could be adversely affectedNew
8. 08attract new solutions customers or programs would not only reduce our revenues and potential downstream value, but could also slow our accumulation of know-how and data assets, thereby hindering our ability to advance our technological differentiation and improve our tools and services offeringsNew
9. 09We have exposure to the volatility and liquidity risks inherent in holding equity interests in other operating companies and other non-cash consideration
10. 10Since our founding, alongside strategic and financial investors, we have leveraged our own resources to help secure funding for early stage and small companies. Going forward, we may continue to leverage our own balance sheet and partner with investors to enable companies at all stages to benefit from our platformNew
11. 11We may be unable to complete future strategic acquisitions or successfully integrate strategic acquisitions which could adversely affect our business and financial condition
12. 12We have in the past, and in the future may continue to pursue strategic acquisitions and investments that are dilutive to our stockholders, and such strategic acquisitions or investments could have an adverse impact on our business if they are unsuccessful
13. 13Our programs may not achieve milestones, earn royalties or complete other anticipated key events on the expected timelines or at all, which could have an adverse impact on our business and could cause the price of our common stock to decline
14. 14We use biological, hazardous, flammable and/or regulated materials that require considerable training, expertise and expense for handling, storage and disposal and may result in claims against us
15. 15The release of GMOs or Genetically Modified Materials, whether inadvertent or purposeful, into uncontrolled environments could have unintended consequences, which may result in increased regulatory scrutiny and otherwise harm our business and financial condition
16. 16Third parties may use our engineered cells, materials, and organisms and accompanying production processes in ways that could damage our reputation
17. 17International expansion of our business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States
18. 18Our investments in and use of AI may result in reputational harm, liabilities, or other adverse consequences to our business operations
19. 19Our recent restructuring actions in connection with our plans to reduce operational expenditures may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business50% rewritten

Risks Related to Our Customers

1. 20We are dependent on our customers’ willingness and ability to successfully develop, produce and commercialize products using the cell engineering solutions we deliver and to a lesser extent, on the successful adoption and use of our cell engineering toolsNew
2. 21Our revenue is concentrated in a limited number of customers, some of which are related parties, and our revenue, results of operations, cash flows and reputation may suffer upon the loss of a significant customer

Risks Related to the Synthetic Biology Industry

1. 22Rapidly changing technology and emerging competition in the synthetic biology industry could make the platform, programs, services, tools, and products we and our customers are developing obsolete or non-competitive unless we continue to develop our platform and pursue new market opportunities37% rewritten
2. 23The 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
3. 24Ethical, legal and social concerns about GMOs and Genetically Modified Materials and their resulting products could limit or prevent the use of products or processes using our technologies, limit public acceptance of such products or processes and limit our revenues

Risks Related to Intellectual Property

1. 25If we are unable to obtain, maintain and defend patents protecting our intellectual property, our competitive position could be harmed
2. 26If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed
3. 27We may be subject to claims challenging the inventorship or ownership of our patents, biomaterials and other intellectual property36% rewritten
4. 28commercially reasonable terms, or at all. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our management and employeesNew
5. 29We may become involved in lawsuits or other enforcement proceedings to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and potentially unsuccessful
6. 30Under certain circumstances, we may share or lose rights to intellectual property developed under U.S. federally funded research grants and contracts
7. 31The use of digital genetic sequence information may be subject to the Nagoya Protocol or other treaties or local legislation concerning biodiversity, which could increase our costs and adversely affect our business
8. 32Third party patents may limit our freedom to operate in certain areas, which may adversely affect our business
9. 33If we are sued for infringing, misappropriating, or otherwise violating intellectual property rights of third parties, such litigation could be costly and time consuming and could prevent or delay us from using our platform and technologies
10. 34If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
11. 35Any claims or lawsuits relating to infringement of, misappropriating, or otherwise violating intellectual property rights brought by or against us will be costly and time consuming and may adversely affect our business, financial condition and results of operations
12. 36Intellectual property rights do not necessarily address all potential threats to our business
13. 37Intellectual property disputes of third parties and customers could have a material adverse effect on our business, financial condition, and results37% rewritten
14. 38licensed intellectual property. Any such discontinuation or limitation could have a material and adverse impact on our business, financial condition and results of operationNew
15. 39Our use of “open-source” software could negatively affect our ability to market or provide our services and could subject us to possible litigation63% rewritten

Risks Related to Personnel, IT and Physical Infrastructure

1. 40capacity. If we discover that these buildings and their infrastructure assets are not in the condition we expected when they were acquired, we may be required to incur substantial additional costs to repair or upgrade the laboratoriesNew
2. 41Furthermore, we are dependent upon internet service providers, telecommunications carriers and other website operators, some of which have experienced significant system failures and electrical outages in the past

Risks Related to Financial Reporting

1. 42We use estimates in determining the fair value of certain assets and liabilities. If our estimates prove to be incorrect, we may be required to write down the value of these assets or write up the value of these liabilities, which could adversely affect our financial position
2. 43Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited55% rewritten
3. 44year ended December 31, 2023 was remediated as of December 31, 2024. However, we may in the future discover other areas of our internal controls that require remediationNew
4. 45Adverse developments affecting the financial services industry could adversely affect our business operations, financial condition and results of operations

Risks Related to Governmental Regulation and Litigation

1. 46Failure to comply with federal, state, local and international laws and regulations could adversely affect our business and our financial condition
2. 47We may incur significant costs complying with environmental, health and safety laws and regulations, and failure to comply with these laws and regulations could expose us to significant liabilities
3. 48If we fail to comply with healthcare and other governmental regulations, we could face substantial penalties and our business, financial condition and results of operations could be adversely affected
4. 49We and our laboratory partners are subject to a variety of laboratory testing standards, compliance with which is an expensive and time-consuming process, and any failure to comply could result in substantial penalties and disruptions to our business
5. 50The testing industry is subject to complex and costly regulation and if government regulations are interpreted or enforced in a manner adverse to us, we may be subject to enforcement actions, penalties, exclusion, and other material limitations on our operations60% rewritten
6. 51meet HIPAA standards requires substantial investment. Being subject to HIPAA as a covered entity or business associate exposes us to significant fines and penalties, including criminal fines and penaltiesNew
7. 52Our employees, agents, contractors, research partners, consultants or vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
8. 53Distribution and use of screening and/or diagnostic tests marketed under an EUA from the FDA are subject to certain limitations, and the continued availability of such authorizations is subject to government discretion25% rewritten
9. 54government contracts, we may not be able to limit third parties, including our competitors, from accessing certain of these technology or data rights, including intellectual property, in providing products and services to the governmentNew
10. 55We are engaged in certain research activities involving controlled substances which may be subject to significant regulation by the DEA, FDA, and other regulatory agencies
11. 56Changes in government regulations may materially and adversely affect our sales and results of operations
12. 57Significant disruptions to our and our service providers’ information technology systems or data security incidents could result in significant financial, legal, regulatory, business and reputational harm to us
13. 58Governmental trade controls, including export and import controls, sanctions, customs requirements and related regimes, could subject us to liability or loss of contracting privileges or limit our ability to compete in certain markets
14. 59Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations or financial condition
15. 60We may become subject to lawsuits or indemnity claims in the ordinary course of business, which could materially and adversely affect our business and results of operations

Risks Related to our Common Stock, Organizational Structure and Governance

1. 61by 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 transactionsNew
2. 62Our share price may change significantly over time, and you may not be able to resell our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result
3. 63These factors among others may materially adversely affect the market price of our Class A common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock are low
4. 64Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for our securities to decline
5. 65Short sellers may engage in manipulative activity intended to drive down the market price of our Class A common stock, which could also result in related regulatory and governmental scrutiny, among other effects
6. 66We cannot predict the effect the multi-class structure of our common stock may have on the trading price of our Class A common stock