SEC Charges Amyris with Improper Revenue Recognition Resulting from Internal Accounting Control Failures

ADMINISTRATIVE PROCEEDING
File No. 3-20624

October 15, 2021 - The Securities and Exchange Commission today announced settled charges against Amyris, Inc., a San Francisco Bay-Area chemical products developer, for materially overstating its royalty revenues and related internal accounting controls violations.

The SEC's order finds that during the first two quarters of 2018, Amyris improperly recognized royalty revenues from a company that used an Amyris chemical to manufacture Vitamin E products. According to the SEC's order, Amyris executives received information from the Vitamin E manufacturer that was important for Amyris to consider when estimating its royalty revenue. The order finds that the executives failed to share all of this information with Amyris's accounting staff, who were responsible for preparing the company's financial statements. As a result, according to the order, Amyris filed materially inaccurate financial statements that overstated its royalty revenues in the first and second quarters of 2018.

The SEC's order further finds that these errors resulted from internal accounting control failures. In particular, the order finds that Amyris failed to devise internal accounting controls sufficient to provide reasonable assurance that relevant information was communicated to the company's accounting staff. According to the order, the company also lacked sufficient resources within its finance and accounting function to provide reasonable assurance that the company properly accounted for significant transactions like its royalty arrangements. The order finds that company restated its first and second quarter 2018 reported revenue as a result of the misstatements, and reported material weaknesses in its internal control over financial reporting for the 2018 fiscal year.

The SEC's order finds that Amyris violated the reporting, internal controls, and books and records provisions of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 13a-11 and 13a-13 thereunder. Without admitting or denying the order's findings, the company agreed to cease and desist from future violations of these provisions and to pay a $300,000 penalty.

The SEC's investigation was conducted by John Roscigno and Matthew Meyerhofer and supervised by Tracy L. Davis and Monique C. Winkler of the San Francisco Regional Office.