SEC Charges Zymergen Inc. With Misleading IPO Investors About Company’s Market Potential and Sales Prospects

Avatar

September 13, 2024 1:04 PM EDT | Source: Newsfile SEC Press Digestrel=”nofollow sponsored”>


Copy link to section

Washington, D.C.–(Newsfile Corp. – September 13, 2024) – The Securities and Exchange Commission today announced settled charges against Zymergen Inc., an Emeryville, California-based biotechnology company, for misleading IPO investors about its overall market potential, revenue prospects, and customer pipeline for its only commercially available product, an electronics film named Hyaline. Zymergen raised approximately $530 million through its IPO in April 2021 and filed for bankruptcy in 2023. Zymergen agreed to pay a $30 million civil penalty to resolve the SEC’s charges.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREErel=”nofollow sponsored”>. Takes 2 mins.

According to the SEC’s order, Zymergen claimed that it had a $1 billion electronics display market opportunity for Hyaline, but the estimate was based on flawed and unreasonable assumptions that included product markets that were poor fits for Hyaline’s technical characteristics and unsupported premium pricing. The SEC’s order also finds that Zymergen provided misleading revenue forecasts to research analysts that far exceeded internal estimates. Additionally, the order finds that Zymergen misled investors during its first public earnings call by misrepresenting the status of Hyaline’s customer pipeline while omitting significant technical and commercial problems facing the product.


“Pre-revenue and early-stage companies that seek to tap the capital markets must do so with reasonable estimates of their market potential,” said Monique C. Winkler, Director of the SEC’s San Francisco Regional Office. “Today’s order finds that Zymergen failed to satisfy this obligation when it misled investors with what amounted to unsupported hype.”

The SEC’s order finds that Zymergen violated certain antifraud provisions of the federal securities laws. Without admitting or denying the SEC’s findings, and subject to bankruptcy court approval, Zymergen agreed to a cease-and-desist order and to pay the civil penalty referenced above.

The SEC’s investigation was conducted by Anthony Moreno and Eli Greenstein of the San Francisco Regional Office, with assistance from David Baddley and Brent Smyth, and was supervised by Rahul Kolhatkar, Alistaire Bambach, and Jason H. Lee.

info

Invezz.com partners with a wide range of publishers to ensure our readers get the most up to date news. The original press release was published here.

This article is a collaboration between our Editors and our Partners, and it may contain sponsored advertising content and links. The content is not intended as financial advice and is for informational purposes only.


Source link

Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Post

China to raise retirement age for first time since 1978, sparking public outcry

Next Post

The LGL Group, Inc. to Present at Sidoti Virtual Conference on September 18, 2024

Related Posts