May 18, 2021 – An additional lawsuit was filed against Danimer Scientific, Inc. over alleged securities laws violations. The lawsuit was filed in the U.S. District Court for the Middle District of Georgia. It was filed on behalf of investors in Danimer Scientific, Inc. (NYSE: DNMR). securities between December 30, 2020 and May 3, 2021.
May 14, 2021 - An investor in shares of Danimer Scientific, Inc. (NYSE: DNMR) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws by Danimer Scientific, Inc. in connection with certain allegedly false and misleading statements made between December 30, 2020 and March 19, 2021.
Bainbridge, GA based Danimer Scientific, Inc., a performance polymer company, develops, produces, and provides bioplastic replacements for traditional petrochemical-based plastics. Danimer Scientific, Inc was formerly known as "Live Oak Acquisition Corp." ("Live Oak"), a publicly-traded special purpose acquisition company. In December 2020, Live Oak consummated a business combination with Meredian Holdings Group, Inc., doing business as Danimer Scientific ("Legacy Danimer"), a performance polymer company specializing in bioplastic replacements for traditional petrochemical-based plastics (the "Business Combination").
Following the Business Combination, Live Oak changed its name to "Danimer Scientific, Inc.," changed its business to Legacy Danimer's business, and replaced its management with Legacy Danimer's management. Since 2020, Legacy Danimer—and, following the Business Combination, Danimer—has sold polyhydroxyalkanoates commercially under its proprietary "Nodax" brand name for usage in a wide variety of plastic applications including water bottles, straws, and food containers, among others.
The Company has touted Nodax as a 100% biodegradable, renewable, and sustainable plastic, which is purportedly superior to traditional plastics because of its advanced biodegradability. The Company attributes Nodax's advanced biodegradability to microorganisms in nature that eat the bioplastic.
Danimer Scientific, Inc reported that its annual Total Revenue rose from $32.34 million in 2019 to $47.33 million in 2020, and that its Net Loss declined from $19.51 million in 2019 to $12.57 million in 2020.
On March 20, 2021, The Wall Street Journal published an article entitled "Plastic Straws That Quickly Biodegrade in the Ocean, Not Quite, Scientists Say" addressing, among other things, Danimer's claims that Nodax, a plant-based plastic that Danimer markets, breaks down far more quickly than fossil-fuel plastics. The article alleges that according to several experts on biodegradable plastics, "many claims about Nodax are exaggerated and misleading." According to the article, Jason Locklin, the expert who co-authored the study touted by Danimer as validating its material, stated that Danimer's marketing is "sensationalized" and that making broad claims about Nodax's biodegradability "is not accurate" and is "greenwashing."
Shares of Danimer Scientific, Inc. (NYSE: DNMR) declined to as low as $34.15 per share on March 30, 2021.
On April 22, 2021, research firm Spruce Point Capital Management ("Spruce Point") issued a report (the "April Report") demonstrating that the Company's annual report disclosures regarding the purchase price of its production facility in Kentucky (the "Kentucky Facility") were inconsistent with city records. The April Report also established that the production capacity buildout of the Kentucky Facility was only 10% completed as of January 15, 2021, throwing into question Danimer's Class Period statements that several components of the first phase of the production capacity buildout were completed at the end of the third quarter of 2020. Spruce Point's April Report also contained findings from a recent research study into the biodegradability of PHA that in an anaerobic environment, such as a sealed landfill, the PHA product does not completely biodegrade. According to Spruce Point, the study states that bioplastics in a landfill can, in fact, be worse than traditional plastic, as they release methane gas which has a global warming potential that is multiples higher than that of carbon dioxide. The April Report also revealed that Danimer has a history of overstating the size and capacity of its manufacturing facilities, with its descriptions of its production rates consistently changing over the years. Finally, on May 4, 2021, Spruce Point issued a follow-up report (the "May Report") containing information about Danimer newly obtained through a Freedom of Information Act request on the Kentucky Department of Environmental Protection. The May Report revealed that Danimer's production figures, average selling price, and financial projections had been "wildly overstated."
Shares of Danimer Scientific, Inc. (NYSE: DNMR) declined to $15.38 per share on May 11, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of Danimer Scientific, Inc. (NYSE: DNMR) common shares between December 30, 2020 and March 19, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between December 30, 2020 and March 19, 2021, the Defendants made false and/or misleading statements and/or failed to disclose that Danimer Scientific, Inc., had deficient internal controls, that as a result, the Company had misrepresented, inter alia, its operations' size and regulatory compliance, that Defendants had overstated Nodax's biodegradability, particularly in oceans and landfills, and that as a result, the Company's public statements were materially false and misleading at all relevant times.