Ocean Biomedical(US:OCEA)2024-12-23 12:50Financial Performance - The company reported a net loss of $72.1 million for the three months ended March 31, 2023, but reflected a net income of $13.0 million for the three months ended March 31, 2024, primarily due to a gain from the Backstop Put Option Liability[46]. - The net loss for the three months ended March 31, 2024, was $12.999 million, compared to a net loss of $72.092 million for the same period in 2023[94]. - The net income for Q1 2024 was $12,999, compared to a net loss of $72,092 in Q1 2023, representing a significant turnaround[73]. - Total operating expenses for Q1 2024 were $595, a decrease of 88% from $5,387 in Q1 2023[73]. - Research and development expenses for Q1 2024 were $26, a significant reduction from $393 in Q1 2023[73]. - General and administrative expenses decreased by $4.425 million to $569 thousand for the three months ended March 31, 2024, primarily due to reductions in professional service fees, stock-based compensation, and insurance costs[138][141]. Cash and Liabilities - As of March 31, 2024, the company had a stockholders' deficit of $75.8 million, down from $90.8 million as of December 31, 2023[46]. - Current liabilities were reported at $30.1 million as of March 31, 2024, compared to $30.0 million as of December 31, 2023[46]. - Cash and restricted cash at the end of Q1 2024 was $1,004,519, compared to $34,306 at the end of Q1 2023[77]. - Total liabilities decreased to $78,729 from $96,264 year-over-year[70]. - As of March 31, 2024, the company had cash of $19 thousand, restricted cash of $0.5 million, and a working capital deficiency of $28.3 million[120]. - The company has outstanding accounts payable and accrued expenses of $16.9 million as of March 31, 2024, which will be paid off utilizing future proceeds from current and future financings[201]. Revenue Generation - The company has not generated any revenue from product sales since its inception in 2019[45]. - The Company has not generated any revenue to date and does not expect to generate revenue from product sales in the foreseeable future[90]. - The company has not generated any revenue to date, with cash flows resulting from financing activities[201]. Research and Development - The company anticipates moving certain preclinical product candidates in oncology, fibrosis, and/or infectious disease programs into the clinic within the next 12 to 24 months[44]. - The company expects research and development expenses to increase substantially over the next several years due to ongoing clinical trials and regulatory compliance[107]. - Research and development expenses for the three months ended March 31, 2024, include costs for stock-based compensation and licensing agreements[174]. Financing and Capital - The company paid a prepayment of $51.6 million to the Backstop Parties on February 15, 2023, utilizing funds from AHAC's trust account[69]. - The company expects to utilize net proceeds from the Backstop Agreement and future debt and equity financings to fund operations into the third quarter of 2024, having received $1.4 million in cumulative proceeds from the Backstop Agreement as of March 31, 2024[144]. - The company borrowed $13.5 million in the first half of 2023, with $12.6 million remaining in short-term loans as of March 31, 2024[146]. - The company has a common stock purchase agreement allowing it to sell up to $75.0 million in newly issued shares to White Lion Capital LLC[169]. - The company entered into a Securities Purchase Agreement for the sale of up to three Senior Secured Convertible Notes with an aggregate principal amount of up to $27.0 million[187]. Risks and Concerns - The company is subject to risks common to early-stage biotechnology companies, including the need for significant additional capital for research and development efforts[49]. - The company faces substantial doubt about its ability to continue as a going concern due to its reliance on external capital and lack of revenue-generating ability at this stage[120][149]. - The company is subject to various risks, including the successful development and commercialization of product candidates, fluctuations in operating results, and competition in the biopharmaceutical industry[118]. Internal Controls and Governance - The company identified a material weakness in internal control over financial reporting due to inadequate staffing in its accounting department[221]. - The company plans to hire additional accounting personnel, including a new Chief Financial Officer, to address the identified material weakness[222]. - The company is subject to potential investigations by Nasdaq, the SEC, or other regulatory authorities due to its internal control weaknesses[223]. - The company is working on implementing remediation steps to improve its disclosure controls and procedures[222].