{ "docId": "019dd923-622c-750b-8b9a-1a3bea94baf9", "docSlug": "c358888161f0", "documentTitle": "Ginkgo Bioworks (DNA)", "authorId": "58_Scorpion_Capital", "authorName": "Scorpion Capital", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2021-10-06 00:00:00", "orientation": "landscape", "aspectRatio": 1.2941177, "pageNumber": 65, "pageCount": 175, "prevPage": 64, "nextPage": 66, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "dense", "nDataPoints": 4, "notes": "The slide uses a direct excerpt from a 10K filing to support the activist thesis of revenue round-tripping.", "elementsJson": [ "paragraph", "screenshot" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-1a3bea94baf9/65", "deckHref": "/decks/019dd923-622c-750b-8b9a-1a3bea94baf9", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-1a3bea94baf9.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-1a3bea94baf9#slide-65", "components": [ { "bbox": null, "kind": "callout", "text": "Synlogic indicates they “used $13.6MM of the pre-paid research and development expenses” in 2020, which we are almost certain was booked by Ginkgo as non-cash non-related-party revenue.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-2b62-723f-b68a-9c25881ca564", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.9, "x": 0.05, "y": 0.67 }, "kind": "paragraph", "text": "(16) Related-Party Transactions\nIn June 2019, the Company expanded its collaboration and entered into an agreement with Ginkgo for the research and development of engineered microbial therapeutic products. As of December 31, 2020, Ginkgo owns 6,340,771 shares of the Company’s outstanding common stock. See Note 10, Ginkgo Collaboration .\nUnder the agreement the Company made a prepayment to Ginkgo of $ 30.0 million for its foundry services that will be provided to the Company over an initial term of five years . At December 31, 2020, the Company had remaining balances of $ 4.7 million and $ 8.9 million of current and non-current pre-paid research and development costs related to this transaction, respectively. For the year ended December 31, 2020, the Company used $ 13.6 million of the pre-paid research and development expenses.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4bd08b4b-4107-40bb-ab0f-53572d135c6c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.9, "x": 0.05, "y": 0.08 }, "kind": "paragraph", "text": "As a fourth example, we examined Synlogic, another key related-party “customer” in which Ginkgo invested $80MM and where we believe the revenue is also 100% non-cash. We have already discussed our belief that Ginkgo has misclassified Synlogic revenue, in order to make it appear as third-party vs. tainted related-party revenue. We had noted that Synlogic “paid” Ginkgo $30MM out of the $80MM right at closing, for “synthetic biology services,” which we think has been stuffed into a non-related-party bucket and is not broken out further. The language in Synlogic’s 10K suggests the same structure as Genomatica, where Synlogic is given pre-paid R&D credits to “pay” Ginkgo vs. using cash. Synlogic indicates they “used $13.6MM of the pre-paid research and development expenses” in 2020, which we are almost certain was booked by Ginkgo as non-cash non-related-party revenue.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "93ac1a36-9ae8-400f-9c00-71730eeb33ec", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "Under the agreement the Company made a prepayment to Ginkgo of $ 30.0 million for its foundry services that will be provided to the Company over an initial term of five years . At December 31, 2020, the Company had remaining balances of $ 4.7 million and $ 8.9 million of current and non-current pre-paid research and development costs related to this transaction, respectively. For the year ended December 31, 2020, the Company used $ 13.6 million of the pre-paid research and development expenses. — Synlogic 10K filed Mar 25, 2021", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-2b62-723f-b68a-a1b46912a146", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.35, "x": 0.05, "y": 0.96 }, "kind": "source-note", "text": "Source: Synlogic SEC filings; Scorpion Capital analysis and estimates", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e60e8920-4259-4e59-820f-5d2090887822", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.05, "y": 0.62 }, "kind": "title", "text": "Synlogic 10K filed Mar 25, 2021", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "504123f6-db82-4128-938e-7bf2246a7da9", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "1651afcd-684e-4b86-b2fe-f1d4601d5e90", "evidence": "The slide explicitly attempts to expose a contradiction between reported revenue and actual cash flow via related-party transactions.", "confidence": 0.9 } ], "arcBeats": [ { "to": 175, "from": 9, "beatId": "ffe290af-3a4f-4e06-8d60-dfbfc07d2e08", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "The deck presents evidence contradicting Ginkgo's claims and highlighting potential wrongdoings.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }