| COMPANY |
Zymergen Inc |
| COURT |
United States District Court for the Northern District of California |
| CASE NUMBER |
21-cv-06028 |
| JUDGE |
The Honorable James Donato |
| CLASS PERIOD |
Pursuant to Zymergen’s April 2021 initial public offering (“IPO”) |
| SECURITY TYPE |
Common Stock |
Case Background:
On April 23, 2021, Zymergen filed its prospectus on a Form 424B4, which forms part of the Registration Statement. In the IPO, Zymergen sold approximately 18,549,500 shares of common stock at a price of $31.00 per share. The proceeds from the IPO were purportedly to be used for working capital and other general corporate purposes, including the continued investment in commercializing its existing products, launching products in its pipeline, and furthering the development of its biofacturing platform and technology. The Registration Statement touted Hyaline, and predicted that Hyaline will begin generating revenue in the second half of 2021 and presented a purported $1.2 trillion total market opportunity.
The complaint alleges that the Registration Statement was materially false and misleading and omitted to state that: (1) during the qualification process for Hyaline, key customers had encountered technical issues, including product shrinkage and incompatibility with customers’ processes; (2) though the qualification process was critical to achieving market acceptance for Hyaline and generating revenue, Zymergen lacked visibility into the qualification process; (3) as a result, Zymergen overestimated demand for its products; (4) as a result of the foregoing, Zymergen’s product delivery timeline was reasonably likely to be delayed, which in turn would delay revenue generation; and (5) as a result of the foregoing, the defendants’ positive statements about Zymergen’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
Current Status of Case:
On April 4, 2024, Defendants filed Answers to the Amended Complaint and Motions to Dismiss Lead Plaintiff’s Second Amended Complaint. On August 14, 2024, the Court entered an Order denying the Motion to Dismiss in part and granting Motion to Dismiss in part. This action is in the discovery phase and is ongoing.
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