Ocean Biomedical(US:OCEA)2024-04-15 21:27Financial Performance - For the three months ended September 30, 2023, the net loss was $14,087,000, compared to a net loss of $3,668,000 for the same period in 2022, representing an increase of 284%[295] - The net loss per common share for the three months ended September 30, 2023, was $(0.53), compared to $(0.16) for the same period in 2022, reflecting a deterioration in earnings[295] - The net loss for September 2023 was $14,087,000, compared to a net loss of $3,668,000 in September 2022, representing an increase of 284.5%[314] - The net loss for the nine months ended September 30, 2023, was $97.6 million, compared to a net loss of $16.4 million for the same period in 2022, representing an increase of 495%[341] - Total operating expenses for September 2023 were $2,655,000, a decrease of 16.3% from $3,173,000 in September 2022[314] Shareholder Equity and Stock - The weighted-average shares of common stock outstanding for the three months ended September 30, 2023, were 26,605,147, compared to 23,355,432 for the same period in 2022, indicating a 14% increase in shares outstanding[295] - The company had 34,149,046 shares of common stock outstanding as of November 9, 2023, up from 23,355,432 shares as of December 31, 2022, representing a 46% increase[297] - The company recognized a net impact of $50,021,000 on total stockholders' equity from the business combination, after accounting for issuance costs of $2,049,000[289] - The company has the potential to issue up to an additional 19,000,000 shares of common stock as Earnout Shares based on stock price performance, contingent on the volume-weighted average price exceeding specified thresholds[290] Liabilities and Deficits - Total current liabilities increased to $30,851,000 as of September 30, 2023, from $12,661,000 as of December 31, 2022, marking a significant rise of 143%[310] - Total liabilities rose to $76,255,000 as of September 30, 2023, compared to $12,661,000 as of December 31, 2022, indicating a substantial increase of 503%[310] - The accumulated deficit increased to $(179,199,000) as of September 30, 2023, compared to $(81,589,000) as of December 31, 2022, reflecting a worsening financial position[310] - The total stockholders' deficit increased to $(75,224,000) as of September 30, 2023, from $(61,657,000) at June 30, 2023[316] Cash Flow and Working Capital - Operating cash flows resulted in a net cash used of $8.6 million for the nine months ended September 30, 2023, compared to $960,000 for the same period in 2022[322] - The company had a working capital deficiency of $29.8 million as of September 30, 2023[327] - Total cash and restricted cash at the end of the period was $1.03 million, up from $116,000 at the end of the previous year[322] Research and Development - Research and development expenses decreased to $305,000 in September 2023 from $1,858,000 in September 2022, a reduction of 83.7%[314] - The company has incurred significant additional research and development efforts for its therapeutic products, requiring substantial capital and personnel[343] - The company anticipates moving certain preclinical product candidates into clinical trials within the next 12 to 24 months[340] Debt and Financing - The principal of remaining short-term loans outstanding was $12.1 million as of September 30, 2023[330] - The Company recognized a loss on extinguishment of debt of $1,208,000 for the nine months ended September 30, 2023, related to the issuance of 200,000 shares for extensions of the maturity date[349] - The Company issued 1,365,000 shares of common stock to the Sponsor as consideration for loans totaling $2.1 million, with interest rates of 8% and 15% per annum[365] - The Company entered into a securities purchase agreement for the sale of up to three Senior Secured Convertible Notes totaling up to $27,000,000, with the initial Note amounting to $7,560,000[410] Other Financial Obligations - The Company is required to pay Elkurt an initial license fee of $110,000 and an annual maintenance fee of $3,000, increasing to $4,000 in 2029[354] - The Company has a contractual obligation to pay Elkurt 1.5% of net sales and 25% of non-royalty sublicense income prior to the first commercial sale[355] - The Company recorded interest expense of $36,852 for the nine months ended September 30, 2023[349] Market Conditions and Future Outlook - The Company's market capitalization fell below $100,000,000 for 10 consecutive trading days, triggering the "Initial Installment Trigger Date" under the SPA, requiring installment payments to the Investor starting November 1, 2023[406] - An Equity Conditions Failure was triggered as the daily trading volume of Company shares fell below $1,500,000 during the 20 days preceding the Initial Installment Trigger Date[406] - The Company expects to continue generating operating losses for the foreseeable future, dependent on successful research and development[342]