Amyris Inc. [previously and extensively], the much-ballyhooed genetic engineering spinoff created by UC Berkeley with the promise, never fulfilled, of creating cheap, cleaning burning fuel from plant cellulose, has yet to make a nickle, and in it’s latest quarterly report for the Security and Exchange Commission has warned of money woes, possible layoffs, and research cutbacks.
But there’s one notable bright spot: The company is working to create genetically engineered microbes for the Pentagon.
First the bad news, from the Emeryville-based company’s latest Form 10-Q filing:
The Company has incurred significant operating losses since its inception and believes that it will continue to incur losses and negative cash flow from operations into at least 2017. As of June 30, 2016, the Company had negative working capital of $108.3 million, an accumulated deficit of $1,066.0 million, and cash, cash equivalents and short term investments of $2.5 million. The Company will need to raise cash from additional financings or strategic asset divestments as early as the third quarter of 2016 to support its liquidity needs. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to continue as a going concern, it may be unable to meet its obligations under its existing debt facilities, which could result in an acceleration of its obligation to repay all amounts outstanding under those facilities, and it may be forced to liquidate its assets.
As of June 30, 2016, the Company’s debt, net of discount and issuance costs of $44.7 million, totaled $181.4 million, of which $80.0 million is classified as current. In addition to upcoming debt maturities, the Company’s debt service obligations over the next twelve months are significant, including $21.0 million of anticipated cash interest payments. The Company’s debt agreements contain various covenants, including certain restrictions on the Company’s business that could cause the Company to be at risk of defaults, such as the requirement to maintain unrestricted, unencumbered cash in defined U.S. bank accounts in an amount equal to at least 50% of the principal amount outstanding under its loan facility with Stegodon Corporation (or “Stegodon”), as assignee of Hercules Capital, Inc. As discussed below, the Company has received a waiver of compliance with such covenant through October 31, 2016. A failure to comply with the covenants and other provisions of the Company’s debt instruments, including any failure to make a payment when required would generally result in events of default under such instruments, which could permit acceleration of such indebtedness. If such indebtedness is accelerated, it would generally also constitute an event of default under the Company’s other outstanding indebtedness, permitting acceleration of such other outstanding indebtedness. Any required repayment of such indebtedness as a result of acceleration or otherwise would consume current cash on hand such that the Company would not have those funds available for use in its business or for payment of other outstanding indebtedness. Please refer to Note 5, “Debt” and Note 6, “Commitments and Contingencies” for further details regarding the Company’s debt service obligations and commitments. The Company also has significant outstanding debt and contractual obligations related to capital and operating leases, as well as purchase commitments.
In addition to the need for financing described above, the Company may take the following actions to support its liquidity needs through the remainder of 2016 and into 2017:
• Effect significant headcount reductions, particularly with respect to employees not connected to critical or contracted activities across all functions of the Company, including employees involved in general and administrative, research and development, and production activities.
• Shift focus to existing products and customers with significantly reduced investment in new product and commercial development efforts.
• Reduce production activity at the Company’s Brotas manufacturing facility to levels only sufficient to satisfy volumes required for product revenues forecast from existing products and customers.
• Reduce expenditures for third party contractors, including consultants, professional advisors and other vendors.
• Reduce or delay uncommitted capital expenditures, including non-essential facility and lab equipment, and information technology projects.
• Closely monitor the Company’s working capital position with customers and suppliers, as well as suspend operations at pilot plants and demonstration facilities.
Implementing this plan could have a negative impact on the Company’s ability to continue its business as currently contemplated, including, without limitation, delays or failures in its ability to:
• Achieve planned production levels;
• Develop and commercialize products within planned timelines or at planned scales; and
• Continue other core activities.
Furthermore, any inability to scale-back operations as necessary, and any unexpected liquidity needs, could create pressure to implement more severe measures. Such measures could have an adverse effect on the Company’s ability to meet contractual requirements, including obligations to maintain manufacturing operations, and increase the severity of the consequences described above.
But the Pentagon came calling with cash
In a story we missed last September, the Pentagon’s Defense Advanced Research Project Agency coughed up $34.5 million from the agency’s Living Foundries program.
And just what is that program?
Find out, after the jump. . .
Here’s how DARPA describes it, or, rather, here’s how DARPA obfuscates its goals:
The goal of the Living Foundries program is to leverage the unparalleled synthetic and functional capabilities of biology to create a revolutionary, biologically-based manufacturing platform to provide access to new materials, capabilities and manufacturing paradigms for the DoD and the Nation. Engineering biology is emerging as a powerful technology with the potential for significant impact in multiple areas, including novel materials, sensing capabilities and therapeutics. However, the present ability to harness that potential is limited by the ad hoc, trial-and-error process that defines the current SOA. Living Foundries seeks to transform biology into an engineering practice by developing the tools, technologies, methodologies, and infrastructure to speed the biological design-built-test-learn cycle and expand the complexity of systems that can be engineered. The tools and infrastructure developed as part of this program are expected to enable the rapid and scalable development of transformative products and systems that are currently too complex to access.
The Living Foundries program is comprised of two components, Living Foundries: Advanced Tools and Capabilities for Generalizable Platforms (ATCG) and Living Foundries: 1000 Molecules.
The first component, Living Foundries: ATCG, began in 2012 and focuses on the development of next-generation tools and technologies for engineering biological systems with the goal of compressing the biological design-build-test-learn cycle by at least 10 times in both time and cost while at the same time increasing the complexity of systems that are created. Technical areas of interest include design and automation tools, modular genetic parts and devise, standardized test platforms and chassis, tools for rapid physical construction of biological systems, editing and manipulation of genetic designs and new characterization and debugging tools for synthetic biological networks.
The second component of the program, Living Foundries: 1000 Molecules, builds upon the advancements and tools being developed under ATCG to create a scalable, integrated, rapid design and prototyping infrastructure for the facile engineering of biology. This infrastructure will be defined by tools and processes to make possible a scale and sophistication of experimentation that does not exist today, and will provide a flexible, efficient and continuously improving capability to the DoD and the engineering biology community. To demonstrate the power of the capabilities being developed, the infrastructure will generate 1000 new molecules of relevance to the DoD, including chemical building blocks for accessing radical new materials that are impossible to create with traditional petroleum-based feedstocks.
When the Pentagon seizes on GMOs, it’s time to start worrying.
More from Military & Space Electronics:
Materials sciences experts at Amyris Inc. in Emeryville, Calif., are searching for ways of developing biological materials easily for advanced sensing capabilities, chemicals, materials, and therapeutics as part of a program to develop a biology-engineering infrastructure for the U.S. Department of Defense (DOD) and for the engineering biology community.
Amyris engineers will seek to create a revolutionary, biologically based technology platform to provide new materials, capabilities, and manufacturing paradigms for the U.S. military.
Five other research organizations are working on the DARPA Living Foundries program: Twist Bioscience Corp. in San Francisco; University of Illinois in Urbana, Ill.; Regents of the University of Colorado in Boulder, Colo.; Massachusetts Institute of Technology (MIT) in Cambridge, Mass.; and the University of Texas in Austin, Texas.
Key technical areas of the program include computers to link component technologies; design tools to engineer novel biosynthetic pathways, gene cluster discovery, and chemical structure prediction; methods for automated construction of genetic designs; design evaluation tools to enable massively parallel testing, analysis, validation, and verification of engineered systems; and feedback tools with high-volume data generation.
So let’s see if we’ve got this straight.
A company originally bankrolled to create an antimalarial drug vastly cheaper than the original, plant derived artemisinin, mwerely put a lot of farmers out of work while producing a pill at the same price as the plant derivative.
Then it promised to bring us cheap, high energy, clean-burning fuel, then failed at that.
It then turned to its only profitable activity, making cosmetic ingredients, and now it’s partnering with the military.
And its stock plummeted so low than from high of $33.85 in February, 2011, it’s selling for forty cents at the moment, costing investors [including Bill Gates] hundreds of millions.
Ain’t it grand?!