On March 23, 2025, the Debtors filed the Bankruptcy Petitions seeking relief under the Bankruptcy Code in the Bankruptcy Court. In addition to the petitions, the Company filed, among other things, a motion with the Bankruptcy Court seeking to jointly administer the Chapter 11 Cases under the caption In re 23andMe Holding Co., et al. The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In order to continue operating in the ordinary course of business, the Debtors filed with the Bankruptcy Court motions seeking a variety of “first-day” relief, including the authority to pay employee wages and benefits and compensate certain vendors and suppliers on a go-forward basis. The Debtors also filed a motion seeking approval to reject numerous contracts, including the real estate leases in Sunnyvale and South San Francisco, to reduce the Company’s ongoing operating expenses.

The Debtors also filed a motion seeking authorization to pursue a structured sale of their assets pursuant to a competitive auction and sale process under Section 363 of the Bankruptcy Code. The Special Committee engaged Moelis & Company LLC to advise on the Company’s strategic options, including a potential sale of all, substantially all, or a portion of the Debtors’ assets in connection with the Bankruptcy Petitions. Any of those sales would be subject to review and approval by the Bankruptcy Court and compliance with court-approved bidding procedures. The Company cannot be certain that the Company’s securityholders will receive any payment or other distribution on account of their shares following such sales.

In connection with the filing of the Chapter 11 Cases, the Company entered into a binding term sheet (the “DIP Term Sheet”) with JMB Capital Partners Lending, LLC (“JMB”), pursuant to which, and subject to the satisfaction of certain conditions, including the approval of the Bankruptcy Court, JMB agreed to provide loans under a non-amortizing priming superpriority senior secured term loan credit facility in an aggregate principal amount up to $35.0 million (the “DIP Facility”). The terms and conditions of the proposed DIP Facility are set forth in the DIP Term Sheet. On April 28, 2025, the Company entered into a credit agreement governing the DIP Facility with JMB and its subsidiaries (the “DIP Credit Agreement”). See Note 21, “Subsequent Events,” for more information regarding the DIP Credit Agreement.

The following table sets forth, as of March 31, 2025, information about the amounts presented as liabilities subject to compromise in the consolidated balance sheets:


	March 31, 2025
	(in thousands)
Accounts payable	$	5,183
Accrued payables and other current liabilities (includes a related party amount of $2,255)	6,523
Operating lease liabilities	60,915
Accrued settlement and legal expenses	39,293
Other liabilities	1,590
Total liabilities subject to compromise	$	113,504

Additionally, certain expenses resulting from and recognized during the Chapter 11 Cases are now being recorded in reorganization items in the consolidated statements of operations and comprehensive loss. The following table sets forth, for the fiscal year ended March 31, 2025, information about the amounts presented as reorganization items in the consolidated statements of operations and comprehensive loss:

Since the filing of the Bankruptcy Petitions, the Company’s operating cash flows for the fiscal year ended March 31, 2025 did not include any cash outflows related to reorganization items. However, $1.4 million in professional fees was accrued as of March 31, 2025 and classified as reorganization items, which will be reflected in future cash outflows.