Ginkgo Bioworks Provides Compensation Information Related to Recent Acquisitions

Rhea-AI Summary

Ginkgo Bioworks (NYSE: DNA) announced grants of restricted stock units worth $4,292,000 to Patch Bio employees and $3,530,000 to Reverie Labs employees. The units were approved as inducements for employment, vesting over time based on continued service.

Insights

Financial Analyst

The grants of restricted stock units (RSUs) by Ginkgo Bioworks to key employees of Patch Biosciences and Reverie Labs represent a strategic move to incentivize and retain talent following significant corporate transactions. The aggregate fair value of these grants, amounting to over $7 million, reflects a substantial investment in human capital, which is a critical asset in the biotech industry. The vesting conditions tied to continued employment suggest a focus on long-term employee retention, which can foster stability and continuity in the company's operations.

Analyzing the financial implications, the grants could dilute existing shareholders' equity to a certain extent. However, if the integration of Patch Bio and Reverie's expertise translates into accelerated innovation and product development, the long-term value creation might outweigh the immediate dilutive effects. Investors should monitor the performance metrics and milestones associated with these acquisitions to assess the return on this human capital investment.

Human Resources Expert

From a human resources perspective, Ginkgo Bioworks' decision to provide RSUs to the acquired companies' employees is a strategic HR move, typically aimed at aligning the interests of the employees with those of the company and its shareholders. The use of RSUs as compensation can be particularly effective in the competitive biotech industry, where attracting and retaining top talent is crucial for driving innovation and maintaining a competitive edge.

The vesting schedule is standard, with a one-year cliff followed by monthly vesting, which serves as an incentive for employees to stay with the company. The alternative vesting condition for Patch Bio employees, allowing full vesting approximately nine months from the grant date if employment is terminated without cause, is an interesting retention and motivation tool, ensuring that even in the event of organizational changes post-acquisition, key talent is compensated fairly.

Market Research Analyst

In terms of market impact, Ginkgo Bioworks' investment in human resources through RSUs is indicative of its commitment to integrating the acquired companies' talent and technologies. The biotech industry is driven by innovation and the ability to successfully assimilate new capabilities can provide Ginkgo with a competitive advantage. Market analysts will likely view this move as a positive signal that Ginkgo is taking concrete steps to enhance its platform for cell programming and biosecurity.

However, the true impact on Ginkgo’s market position will depend on how effectively the company leverages the new talent and whether this leads to successful product developments or improvements in their biosecurity platform. It will be important for market analysts to track subsequent performance indicators and product pipeline updates to evaluate the long-term impact of these acquisitions and talent investments on Ginkgo's market value.

BOSTON, Feb. 28, 2024 /PRNewswire/ -- Today, Ginkgo Bioworks (NYSE: DNA), which is building the leading platform for cell programming and biosecurity, announced that in connection to its transaction with Patch Biosciences, Inc. ("Patch Bio") on February 26, 2024, Ginkgo approved grants of restricted stock units with an aggregate grant date fair value of  $4,292,000 to eight Patch Bio employees, and in connection with its acquisition of Reverie Labs, Inc. ("Reverie") on February 23, 2024, Ginkgo approved grants of restricted stock units with an aggregate grant date fair value of $3,530,000 to four Reverie employees. The restricted stock units were granted without stockholder approval as material inducements to the employees entering into employment with Ginkgo pursuant to NYSE Listed Company Manual Section 303A.08 and were approved by the compensation committee of Ginkgo's board of directors.

Consistent with Ginkgo's standard vesting schedules, each grant of restricted stock units to former Reverie employees will vest as to 25% of the restricted stock units on the one-year anniversary of the grant date and as to 1/48 of the restricted stock units monthly thereafter, subject to the employee's continued employment or service to Ginkgo or one of its subsidiaries on the applicable vesting date. Each grant of restricted stock units to former Patch Bio employees will vest either (i) as to 25% of the restricted stock units on the one-year anniversary of the grant date and as to 1/48 of the restricted stock units monthly thereafter, or (ii) for certain employees, as to 100% of the restricted stock units, approximately, nine (9) months from the grant date (and will fully vest on the last day of an employee's employment, if such employee's employment is terminated without cause), subject to, in all cases, the employee's continued employment or service to Ginkgo or one of its subsidiaries on the applicable vesting date.The restricted stock units are subject to the terms of the Ginkgo Bioworks Holdings, Inc. 2022 Inducement Plan and individual award agreements thereunder.

About Ginkgo Bioworks

Ginkgo Bioworks is the leading horizontal platform for cell programming, providing flexible, end-to-end services that solve challenges for organizations across diverse markets, from food and agriculture to pharmaceuticals to industrial and specialty chemicals. Ginkgo's biosecurity and public health unit, Concentric by Ginkgo, is building global infrastructure for biosecurity to empower governments, communities, and public health leaders to prevent, detect and respond to a wide variety of biological threats. For more information, visit ginkgobioworks.com and concentricbyginkgo.com, read our blog, or follow us on social media channels such as X (@Ginkgo and @ConcentricByGBW), Instagram (@GinkgoBioworks), Threads (@GinkgoBioworks) or LinkedIn.

Forward-Looking Statements of Ginkgo Bioworks

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the capabilities and potential success of the acquisitions and Ginkgo's cell programming platform. These forward-looking statements generally are identified by the words "believe," "can," "project," "potential," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) volatility in the price of Ginkgo's securities due to a variety of factors, including changes in the competitive and highly regulated industries in which Ginkgo operates and plans to operate, variations in performance across competitors, and changes in laws and regulations affecting Ginkgo's business, (ii) the ability to implement business plans, forecasts, and other expectations, and to identify and realize additional business opportunities, (iii) the risk of downturns in demand for products using synthetic biology, (iv) the uncertainty regarding the demand for passive monitoring programs and biosecurity services, (v) changes to the biosecurity industry, including due to advancements in technology, emerging competition and evolution in industry demands, standards and regulations, (vi) our ability to realize the expected benefits of merger and acquisition transactions, (vii) the outcome of any legal proceedings against Ginkgo, including as a result of recent acquisitions, (viii) our ability to realize the expected benefits from and the success of our Foundry platform programs, (ix) our ability to successfully develop engineered cells, bioprocesses, data packages or other deliverables, and (x) the product development or commercialization success of our customers. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" section of Ginkgo's quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission (the "SEC") on November 8, 2023 and other documents filed by Ginkgo from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Ginkgo assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Ginkgo does not give any assurance that it will achieve its expectations.

GINKGO BIOWORKS INVESTOR CONTACT:
investors@ginkgobioworks.com 

GINKGO BIOWORKS MEDIA CONTACT:
press@ginkgobioworks.com

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SOURCE Ginkgo Bioworks

FAQ

What did Ginkgo Bioworks announce regarding restricted stock units?

Ginkgo Bioworks approved grants of restricted stock units with a total value of $4,292,000 to eight Patch Bio employees and $3,530,000 to four Reverie Labs employees.

Why were the restricted stock units granted to employees?

The restricted stock units were granted as material inducements for the employees entering into employment with Ginkgo Bioworks.

How will the restricted stock units vest for former Reverie Labs employees?

The units will vest as to 25% on the one-year anniversary of the grant date and 1/48 monthly thereafter, contingent on the employee's continued service.

What are the vesting conditions for former Patch Bio employees?

The units will vest either as to 25% on the one-year anniversary of the grant date and 1/48 monthly thereafter, or for certain employees, as to 100% approximately nine months from the grant date.

Under which plan are the restricted stock units subject to?

The units are subject to the terms of the Ginkgo Bioworks Holdings, Inc. 2022 Inducement Plan and individual award agreements.