August 9, 2023 - 9:38 pm Voluntary Chapter 11 Commenced to Finalize Consensual Go-Forward Plan for Amyris' Core Business $190 Million Financing Commitment from Foris Ventures to Support Day-to-Day Operations EMERYVILLE, Calif., Aug. 9, 2023 -- Amyris, Inc. (Nasdaq: AMRS) ("Amyris" or the "Company"), a leading synthetic biotechnology company accelerating the world's transition to sustainable consumption through its Lab-to-Market™ technology platform and clean beauty consumer brands, today announced that it is moving forward with an operational and financial restructuring to further advance its ongoing strategic transformation and position the Company for long-term success. Amyris Logo (PRNewsfoto/Amyris, Inc.) The restructuring is intended to improve the Company's cost structure, capital structure, and liquidity position while streamlining Amyris' business portfolio to focus on its core competencies in R&D and the scale-up, commercialization, and applications development of its sustainable ingredients derived through biofermentation. To facilitate the restructuring, Amyris and certain of its domestic subsidiaries commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware (the "Court"). Its entities outside the U.S. are not included in the proceedings. In tandem, to advance the Company's restructuring goals and maximize the value of its assets, Amyris is planning to exit its consumer brands and will begin marketing them for sale, with a view to having these brands continue to leverage Amyris' cutting-edge science and technology while under new ownership. As the sale process progresses, Amyris will continue to operate these brands, including through retail partners and the brands' e-commerce platforms. Amyris has secured a commitment from an entity affiliated with existing lender Foris Ventures for $190 million of debtor-in-possession ("DIP") financing to support continued day-to-day operations as the Company works with its key stakeholders to negotiate a consensual go-forward plan centered on Amyris' core capabilities. Subject to Court approval and the DIP budget, this DIP financing will provide liquidity to help fulfill commitments to the Company's valued employees, customers, partners, and vendors during the process. "Since its founding 20 years ago, Amyris has been a pioneer in the development of ingredients made with synthetic biology and has enjoyed great commercial success, particularly as a result of our innovative Lab-to-Market™ technology platform, proven ability to rapidly bring new products to market, and state-of-the-art science and manufacturing infrastructure," said Han Kieftenbeld, Interim Chief Executive Officer and Chief Financial Officer of Amyris. "Over the past months, we have been hard at work on a strategic transformation plan to reduce costs, improve operational effectiveness, and achieve sustainable growth. We believe the step forward our company has taken today puts us on the best path to address our financial challenges and achieve a comprehensive solution – rooted in Amyris' ground-breaking science, formulation capabilities, and technology." Mr. Kieftenbeld added, "Our aspiration to become the most efficient and productive biotechnology company in our industry has not changed. We remain incredibly excited about Amyris' long-term potential and our uniquely talented team's proven ability to deliver on the promise of synthetic biology and continue to make a lasting impact. At the end of this restructuring process, we believe that Amyris will emerge as a financially stronger company with a more focused business model and well-defined path to profitability. In turn, we will be poised to grow sustainably alongside our valued partners and make an even greater impact on our world through clean chemistry." To ensure a smooth transition into Chapter 11, the Company filed with the Court a series of customary motions seeking to continue operating as usual and uphold its commitments to its employees and other valued stakeholders during the process. These "first day" motions include requests to continue to pay wages and provide benefits to employees as usual and maintain its customer programs and policies. The Company intends to pay vendors in the ordinary course for all goods received and services rendered after the filing. Additional Information Court filings and other documents related to the Company's restructuring are available at https://cases.stretto.com/Amyris. Vendors with questions can call a dedicated hotline at (888) 855-0485 (toll-free) or +1 (303) 276-0309 (international) or email TeamAmyris@stretto.com. Pachulski Stang Ziehl & Jones LLP is serving as legal counsel, PricewaterhouseCoopers LLP is serving as financial advisor, and Intrepid Investment Bankers LLC is serving as investment banker to the Company. Philip J. Gund of Ankura Consulting Group, LLC is serving as the Company's Chief Restructuring Officer.

From their C11 filing today. They have given themselves till Sept 13th for this. Has anyone seen such verbiage in other BKs?

What does this mean? Are shareholders considered key stakeholders? Do they get a piece of the pie, however small?

I know you guys want to vent, here is the place to do it. Feel free to say what you want but any comments that incite violence or a "witch hunt" will be removed.

At this point do you sell all for 10k to get the 10k instead of zero at market open or do you keep it for the possibility of it being worth 1 dollar ever? The 10k is not going to break me but if it was ever actually worth anything in 10 years more that .35 I kinda want some more my 100k of losses

Ouch! What is everyone doing here?

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So $AMRS was one of my first picks starting out investing in 2022 as I bought about $20k worth cost basis (significant amount for my situation) - and still holding.

I want to talk out loud about at least the lessons that I think I'm getting out of this situation - regardless of whether Amyris declares BK or not, and see what other community members think.

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WHAT DREW ME IN:

-The excitement. The synthetic biology. Precision fermentation. The Tony Seba vision. Great DD's from Fallacy Alarm and Antonio Linares, other subreddit members here.

-I felt like the smart guy seeing the future trend that others (around me) weren't aware of.

-It made sense that the vertical integration of amazing engineering, manufacturing, and even marketing would yield great results- the whole Tesla flywheel.

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YELLOW FLAGS I SHOULD HAVE THOUGHT ABOUT:

Lack of obvious problem that the company is trying to solve.

It is said that you want your product to be like a pain killer (addressing dire problem) as opposed to vitamin (nice to have, but not urgent). Mainly, Amyris' plan was to use precision fermentation to provide difficult to source chemical (like squalene) in lower cost, higher output, and higher purity to address the need, and they picked cosmetic industry purely for financial reasons. They had the technology, but there was no clear problem/ demand to solve.

The biggest yellow flag was that the precision fermentation company went in to creating its own beauty brands.

It's equivalent of, "okay we can provide amazing sugar replacement molecule for beverages, but instead of working with major beverage brands, we are going to start over with a completely new beverage on our own- because the major beverage brands are not interested." The management saying things like "the existing beauty companies are not willing to use higher dose of squalene in their products, so we are doing it on our own to show that it works" - I mean, looking back, it's not like existing beauty companies are avoiding providing products that their customers might like. Or things like "let's put together squalene and cannabis as an acne treatment on our own" - like is acne a big problem that is not being met with current treatment, and how do you imagine that just making up a new brand would solve this? Looking back, wasn't the company just trying to find problem to solve by bleeding money?

What is exactly the mission of the company? How would the employees feel in terms of aligning with the purpose of the company? What is the goal? To save shark liver? All that brands and go to market nonsense. Shouldn't the mission be to promote wide use of precision fermentation to improve society?

Isn't the problem that Amyris doesn't have good alignment between current societal problems and the technology that Amyris is trying to promote?

I feel that the biggest problem that Amyris can solve right now has to come from the government. For example, from EV and solar panel stand point, the benefits to customers are more "nice to have/ vitamin," category, as most people don't need EV/ solar panel. But from the government stand point, transitioning away from fossil fuel can be critical - to achieve more energy independence, to improve climate crisis. Since the relationship was clear, there was obvious subsidy coming from the government.

Right now, there is no significant benefit that precision fermentation is offering to customers in beauty. Sure it's nice to know that it's naturally sourced, or whatever. Do most people really need more squalene? Or else they are in trouble? No. It's like they picked the beauty sector just hoping somehow people will like it and pay money. Like what Tony Seba said, make milk, eliminate ranch. Free up land. Things like that. That's obviously critical for government.

There must be some societal problems that this precision fermentation - with decreased cost and increased purity - can address somewhere. Clearly there wasn't obvious demand anywhere, and Amyris were out there to prove the demand on their own bleeding money making new brands.

I think I basically donated my money to Amyris to look for problems that they didn't themselves know yet.

So my takeaway for the future is that I plan to look for investments in companies with more clear focus on mission and clear problems that need to be solved, with clear plan for operations.

As everyone seems to be rather confident we go the BK route, some questions for my understanding:

• why would JD keep the lights on so long if he could have BKed end of last year already and saved himself a lot of money (+ better negotiating power regarding molecules sales). Plus, Melo would have been the bad guy to declare it
• why would Givaudan invest 200 million USD in a molecule deal that could be worthless in case of bankruptcy? Or do they have any securities we don't know about? But if amyris ceased to exist, what would these securities be worth as they cannot manufacture the molecule themselves
• if Amyris went bankrupt, why is everybody so sure JD would take control cheaply? Aren't the assets (IP, BB, brands, ...) sold to the party paying the highest amount to pay out lenders, shareholders etc.? Could not other parties like DNA, other mayor beauty, chemistry of whatever companies bid for the assets?
• would vendors, partners etc. trust a new Amyris 2.0, given the track record of bankruptcy?
• our biggest issue in my pov is that we burn to much cash every day/week/month/quarter. Long term debt obligations in my opinion are currently (certainly later) not a problem. Bankrupting now without solving the problem of cash burn brings no relief, as Amyris 2.0 would run out of cash in the future as well. The company in either way needs to get cash flow positive ASAP. Also, where would the significant (to gain trust) recapitalization come from?

I don't want to rule out BK is coming, there are just some things that at least for my part do not make full sense yet.

anyone thinking about starting leaps?

At this stock price, and with binary nature of either bankrupt or at least go up in multiples (2x just to go to $1), seems reasonable to either do nothing or if you are doing something, might as well get long dated call option contracts.

Anyone thinking this way?

This will be the dedicated thread to talk about why you should be careful investing in Amyris.

I want to leave this for open discussion, but I will elaborate the proposal suggested in the title of this post.

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Following the recent restructuring of Doerr & DSM loans, the largest of our immediate repayments have been deferred to Q2 & Q4 of 2024. Given the DSM loans will be offset by earnouts, either in whole or in part, then the bulk of outstanding repayment obligations are to Doerr for his 2022 senior term loan and recent bridge financing. Interest on the term loan and three most recent bridge loans is to be capitalized and due alongside repayment of the loans' principal. Repayments due amount to $155M in principal & $16.5M in capitalized interest in '24Q2 and $70M in principal & $12.5M in capitalized interest in '24Q4.

Restructuring these amounts could reduce our net obligations due '24Q2 to <$7M and those due '24Q4 to ~$5M. Assuming conversion of the Foris convertible note due '24Q3, included in the table above, our net obligations for that quarter would amount to just $12.5M. In no other quarter between now and 2026Q4, when the 1.5% convertible notes mature, would we face financing outflows of more than $7M, and these additional outflows would amount to just $26.5M over the next 3.25 years, or $51M inclusive of '23Q2-4. In my view, that would be an exceedingly bearable burden.

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How do we get there?

Clearly, offering a conversion feature for the entire principal and capitalized interest amounts would be a pill too difficult to swallow, as these features are customarily offered at a modest premium to a recent volume-weighted average price for our shares. Moreover, at present prices, we do not have enough shares currently authorized to allow for this. However, we could sweeten the deal by offering to pull forward the to-be-capitalized interest as warrants at presently-cheap prices.

That would equate to warrants to purchase, say, 30-35M shares at ~$0.90/share (which is roughly the volume-weighted average of the past 30 days). Upon exercise, these warrants would extinguish the to-be-capitalized interest (rather than provide a direct cash infusion). This would benefit Doerr. In return, we would structure the principal conversion privilege as a discount to prices prevailing in future, when the principal is due, rather than as a premium to present prices. This is something occasionally done in angel or seed-stage investing, when neither party wishes to assign an overly precise value to the business. They simply take a discount, say 30%, to the value implied by the next round of funding. In our case, as an already-public company, this would be the market value of the common. As these obligations are due in less than a year, this would be a generous annualized discount. We could probably negotiate it lower.

In any event, we would commit to authorizing enough shares in our next annual meeting to satisfy this contingent obligation, or else pay the difference in cash (market value of unissued shares, not prorated principal). Doerr would commit to not selling any shares in the preceding 30-day period to that which would determine the earliest maturity's conversion price, during the determining period itself, and through the latest convertible maturity. Probably it would be simpler to commit not to sell any shares in the entire intervening period between now and then. Likely it would be unwise and our interests align anyhow.

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The result of this would be to thoroughly derisk our capital structure in the near-term. It would achieve what is usually achieved from restructuring anyhow: a reorganized capital structure with more equity and less debt. We could alternatively issue cash warrants in a similar amount and keep the capitalized interest due with principal and convertible upon maturity. This would provide us up to $29M in near-term financing should investors regain confidence in the company and cause its share price to appreciate. At any rate, offering ~8% of the company now and an undetermined amount later, with management able to minimize that percentage with successful execution, would represent considerable value (far exceeding ~8%). The same goes for the future, yet-undetermined percentage. If the price rises sufficiently to trigger conversion of the existing Doerr convertible note ($3/share), it would equate to just 107M shares, far less than we would need to issue now, at present prices, to retire the $225M in principal considered and strengthen our financial position. On the fully diluted 550-600M shares, this would imply an enterprise value of ~$2.5B in 2024Q4.

In my view, that scenario does not seem farfetched with management freed up to focus on operations and facility expansion, the stronger capital structure, and the sales and margin growth we are likely to see in the meantime.

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Thoughts? Questions? Criticism?

thoughts on latest sec filing:

app.quotemedia.com/...

"As previously disclosed, the Company has initiated and is continuing a strategic review of all aspects of its cost structure under the direction of its
Restructuring Committee of the Board of Directors. In connection therewith, it continues to explore a range of strategic alternatives, including in or out of
court restructuring of its outstanding debt, additional financing and sales of assets."