Ocean Biomedical issues Series A preferred stock

Ocean Biomedical , Inc. (NASDAQ:OCEA) has announced the private sale of equity securities and amendments to its corporate governance documents, as per a recent 8-K filing with the Securities and Exchange Commission. The announcement comes as the company’s stock trades near its 52-week low of $0.10, having declined 94.5% over the past year. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimates. On Monday, the pharmaceutical company, which specializes in developing treatments for various diseases, filed an amendment to its Certificate of Incorporation to create a new series of preferred stock.

The company, currently valued at just $3.66 million in market capitalization, entered into a securities purchase agreement on Tuesday for the private placement of up to 45,000 shares of its Series A redeemable convertible preferred stock. Each share of Series A preferred stock is priced at $0.01 and is convertible into common stock at the same price per share, subject to approval from Ocean Biomedical’s stockholders for a proposed reverse stock split. InvestingPro data reveals concerning financial health metrics, with a weak current ratio of 0.03, indicating potential liquidity challenges.

The Series A preferred stock comes with voting rights that allow holders to vote alongside common stockholders on the reverse stock split proposal. Each preferred share grants the holder 2,000 votes, but these rights are limited to this specific proposal. Holders of the Series A preferred stock have agreed not to transfer their shares until after the stockholder meeting and to vote their shares in the same proportion as the common stock votes cast.

In addition, the Series A preferred stockholders have the option to require the company to redeem their shares for cash at the stated value after certain conditions are met, starting from the earlier of the stockholder approval of the share increase and 90 days after the issuance’s closing, up to 120 days after closing.

The proceeds from this offering, if not used for redemptions, are intended for general corporate purposes. The offering is exempt from registration under Section 4(a)(2) of the Securities Act of 1933 and Regulation D, meaning that the securities cannot be sold in the U.S. without registration or an exemption.

This strategic move by Ocean Biomedical is aimed at facilitating a reverse stock split, with the newly issued Series A preferred stock serving primarily as a voting mechanism to reflect shareholder sentiment on this matter. The information is based on a press release statement. InvestingPro subscribers have access to 12 additional key insights about Ocean Biomedical’s financial health and market position, along with detailed analysis of its growth prospects and valuation metrics.

In other recent news, Ocean Biomedical, Inc. has reported unregistered equity sales, disclosing a total of 132,163,312 shares of its common stock issued and outstanding. The details of these transactions, including the number of securities sold and the terms, were not specified in the company’s SEC filing. Additionally, Ocean Biomedical announced research findings indicating that its immunotherapy candidates could work synergistically with tyrosine kinase inhibitors, potentially offering new treatment options for non-small cell lung cancer. These findings were made in collaboration with Yale and Brown universities and published in the journal Translational Oncology.

In a separate development, Ocean Biomedical received a notice from Nasdaq regarding potential delisting due to not holding an annual shareholder meeting within the required timeframe. The company plans to address this by holding its annual meeting by March 31, 2025. Furthermore, the company has amended its bylaws to lower the quorum requirement for shareholder meetings, aiming to facilitate the ease of conducting these meetings. Ocean Biomedical also appointed Berkowitz Pollack Brant as its new independent registered public accounting firm, a decision approved by the company’s Audit Committee. These updates reflect the company’s ongoing efforts to maintain compliance with financial and corporate governance standards.

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