uBiome, Inc., announced that it has filed for protection under Chapter 11 of the U.S. Bankruptcy Code in Delaware to facilitate an orderly and efficient sale of its ongoing business, products in development, technology, and lab capabilities.
The Company continues to operate while it conducts active discussions with several interested parties, and is working to finalize terms and announce asset purchase agreement(s) in the coming months.
uBiome will continue to offer the current Explorer™ product as usual throughout the sale process, and uBiome will maintain appropriate staffing and supply levels to support the product and process kits for customers. In addition, the Company will continue to grow its commercial, academic, and research partnerships.
“Together with the Board, we determined that uBiome’s business will be better positioned for success under new ownership,”
said Acting Chief Executive Officer Curtis G. Solsvig III.
“Our Chapter 11 filing allows us to preserve the value of these assets for all stakeholders and continue to serve current and new customers, while we evaluate potential buyers. This step builds on the decisive actions the Board and new management team have recently taken to stabilize the Company and leverage the substantive value of our advanced microbiome testing and analysis assets.”
Steps Taken to Maintain Business Continuity
uBiome has obtained debtor in possession (DIP) financing from 8VC and Silicon Valley Bank to support its ongoing operations during the sale process. This additional financing, combined with normal, ongoing cashflows, will help ensure that uBiome is able to meet its go-forward commitments to employees, customers, and suppliers while also maximizing its chances of successfully selling its assets.
The Company has also filed a series of motions with the Court that, when approved, will allow it to maintain its usual employee compensation and benefit programs, make payments for goods and services in the normal course, and otherwise support the Explorer product as usual. These motions are typical of the Chapter 11 process and are expected to be granted in the first days of the case.
Sale Process
uBiome plans to complete the intended sale process under Section 363 of the U.S. Bankruptcy Code within roughly 75 days. Subject to the Court’s approval, potential buyers will have the opportunity to submit offers to acquire assets associated with the Company’s product lines, testing labs, intellectual property, and data resources individually or in combination with one another. All offers will be evaluated to ensure the highest and best acquisition agreement(s) are achieved for the benefit of uBiome’s creditors, employees, customers, and other stakeholders.
“The goal shared by our leadership team and newly reconstituted Board of Directors is to transition uBiome’s range of compelling scientific products, assets, and technology to strategic and/or financial investors that are better able to realize the full potential of these services and capabilities,”
Mr. Solsvig concluded.
Legacy Issues Leading to uBiome’s Voluntary Chapter 11 Filing
As widely reported, uBiome is under investigation by the government related to business practices under prior management. Shortly after the investigation became public, uBiome’s founders left the Company and the Board of Directors, and the Board added new independent Directors and appointed a new management team. The Company is cooperating with the investigation and will continue to do so while under Chapter 11 protection.
uBiome is advised in this matter by Young Conaway Stargatt & Taylor, LLP, and its investment bankers are GLC Advisors & Co., LLC and GLCA Securities, LLC.