Ocean Biomedical(US:OCEA)2023-08-14 20:05Financial Performance - Operating loss for the three months ended June 30, 2023, was $2,680,000, a decrease from $6,900,000 in the same period of 2022[20]. - Net loss for the six months ended June 30, 2023, was $80,429,000, compared to $12,708,000 for the same period in 2022[20]. - The company reported a net loss per share of $0.49 for the three months ended June 30, 2023, compared to $0.31 for the same period in 2022[20]. - The company reported a net loss of $80,429 for the six months ended June 30, 2023, compared to a net loss of $12,708 for the same period in 2022[26]. - For the three months ended June 30, 2023, the net loss was $13,028,000, compared to a net loss of $7,333,000 for the same period in 2022, representing an increase of 77%[186]. - The net loss per common share for the six months ended June 30, 2023, was $(3.13), compared to $(0.54) for the same period in 2022, indicating a significant increase in losses per share[186]. Assets and Liabilities - Total assets increased to $20,921,000 as of June 30, 2023, compared to $1,842,000 as of December 31, 2022[18]. - Current liabilities rose to $26,679,000 from $12,661,000, reflecting a significant increase in accounts payable and accrued expenses[18]. - Cash and restricted cash at the end of the period was $2,161,000, up from $395,000 at the end of June 30, 2022[26]. - The company had a working capital deficiency of $24,517,838 as of June 30, 2023[34]. - Total accounts payable and accrued expenses increased to $14,044,000 as of June 30, 2023, compared to $11,440,000 at the end of 2022[104]. Stockholder Equity - Additional paid-in capital increased to $153,617,000 as of June 30, 2023, from $70,770,000 at the end of 2022[18]. - The total stockholders' deficit improved to $(8,401,000) as of June 30, 2023, from $(10,819,000) at the end of 2022[18]. - The company recorded a net impact of $50,021,000 on total stockholders' equity from the business combination, with cash from AHAC trust net of redemptions amounting to $52,070,000[71]. - As of June 30, 2023, the total common stock outstanding was 34,012,724 shares, an increase from 23,355,432 shares as of December 31, 2022, representing a growth of approximately 45.6%[138]. Research and Development - Research and development expenses significantly decreased to $28,000 in Q2 2023 from $3,192,000 in Q2 2022[20]. - Research and development expenses for the six months ended June 30, 2023, included stock-based compensation and other costs, with no revenue generated since inception[49][50]. - The company expects to incur losses from operations and generate negative cash flows due to anticipated expenditures related to research and development activities[34]. - The Company aims to move certain preclinical product candidates in oncology, fibrosis, and infectious disease programs into clinical stages within the next 12 to 24 months[215]. Business Combination and Financing - The business combination with Legacy Ocean was valued at approximately $240,000,000 before transaction fees[30]. - The company raised $52,070,000 from reverse recapitalization and $14,260,000 from the issuance of common stock pursuant to the Backstop Agreement[26]. - The business combination on February 14, 2023, resulted in the issuance of approximately 23,355,432 shares valued at $233,554,320 to Legacy Ocean's stockholders[68]. - The Backstop Agreement allows for the purchase of up to 8,000,000 shares of Class A common stock for up to $80,000,000, including shares from stockholders who revoked their redemption elections[75]. Debt and Interest - The Company recognized interest expenses of $24,046 and $36,852 for the three and six months ended June 30, 2023, respectively[91]. - The Company recorded a loss on extinguishment of debt of $13,595,400 for the issuance of Sponsor Extension Shares for the six months ended June 30, 2023[91]. - The deferred underwriting commissions amount to $3,150,000, with interest rates of 9% per annum and 24% per annum following an event of default[92]. Licensing and Agreements - The company has entered into multiple license agreements with Elkurt, which include milestone payments ranging from $50,000 for filing an IND to $250,000 for enrolling the first patient in a Phase 3 clinical trial[195]. - The Rhode Island License Agreement requires the company to pay an initial license fee of $110,000, due within 45 days of raising at least $10 million in equity financing or by November 1, 2023[199]. - The company is required to pay Elkurt 1.5% of net sales and 25% of all non-royalty sublicense income under the Rhode Island License Agreement upon successful commercialization[200]. Company Outlook and Concerns - The company is facing substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued[34]. - The company has no revenue-generating ability at this point in its lifecycle and does not expect to generate revenue in the foreseeable future[49]. - The Company believes its differentiated business model will enable it to commercialize products if approved and replicate licensing partnerships with research institutions[215].