(Bloomberg) — 23andMe Holding Co. filed bankruptcy after it was unable to find a buyer to rescue it from insolvency proceedings and the board of directors rejected a buyout offer from co-founder Anne Wojcicki.
The Silicon Valley-based firm will continue marketing itself to investors with the goal of getting at least one binding offer by May 7, according to court papers. That deadline was set by lenders, who are seeking court permission to loan 23andMe as much as $35 million to fund its bankruptcy.
The Chapter 11 filing in St. Louis will also resolve its legal troubles related to a data breach, according to a statement. That hack compromised information on millions of people and gave a hacker direct access to about 14,000 user accounts.
The company plans to continue operating throughout the sales process, it said.
The bankruptcy is the latest chapter in the saga of the personalized DNA testing company that was valued at $3.5 billion when it went public in 2021. Wojcicki’s efforts to take the struggling company private were rejected by a committee earlier this month.
The company has $277.4 million in assets and $214.7 million in liabilities, court documents show. It received a debtor-in-possession financing commitment of up to $35 million from JMB Capital Partners, according to the statement.
That loan must be approved by the judge overseeing the case. The debt carries a 14% interest rate and would pay a 2% commitment fee, a 6% exit fee and a $100,000 work fee, if approved.
“We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities,” said Mark Jensen, chair and member of the Special Committee of the Board of Directors.
Wojcicki is resigning from her role as chief executive officer but will continue to serve on the board, company said in its statement. Joe Selsavage has been appointed as interim CEO.
The case is 23andMe Holding Co., 25-40976, U.S. Bankruptcy Court Eastern District of Missouri (St. Louis).
–With assistance from Luca Casiraghi and Dorothy Ma.
(Adds details about sale process and bankruptcy throughout.)
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