Ocean Biomedical, Inc. Faces Compliance Issues with Nasdaq Over Late Filing of Quarterly Report

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Written By Jackson Hartwell

Ocean Biomedical, Inc. (NASDAQ: OCEA) finds itself entangled in compliance concerns following the receipt of a notice from The Nasdaq Stock Market LLC (“Nasdaq”) regarding the late filing of its quarterly report on Form 10-Q for the period ended September 30, 2023. 

This development underscores the challenges faced by the biopharma company and raises uncertainties regarding its regulatory standing and market performance.

Compliance Notice from Nasdaq

On November 22, 2023, Ocean Biomedical received a notice from Nasdaq, citing non-compliance with Nasdaq Listing Rule 5250(c)(1) due to the delayed filing of its Form 10-Q. 

Credits: DepositPhotos

Nasdaq’s listing rule mandates listed companies to timely file all required periodic reports with the Securities and Exchange Commission (SEC). 

Ocean Biomedical’s failure to adhere to this requirement has prompted Nasdaq to initiate compliance proceedings against the company.

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Reasons for Delayed Filing

Ocean Biomedical attributes the delay in filing its Form 10-Q to an interpretation issued by the Staff of the U.S. Securities and Exchange Commission (SEC) pertaining to certain accounting and reporting standards for SPAC-related companies with “Forward Purchase Agreements.” 

The company, upon receiving this interpretation, opted to restate its consolidated financial statements for the quarters ended March 31, 2023, and June 30, 2023, to ensure compliance with the SEC’s guidance.

The restatement primarily concerns the accounting treatment of “backstop agreements” with various entities, including Vellar Opportunity Fund SPV LLC-Series 3, Meteora Special Opportunity Fund I, LP, Meteora Select Trading Opportunities Master, LP, and Polar Multi-Strategy Master Fund. 

Ocean Biomedical’s decision to restate its financial statements reflects its commitment to transparent and accurate financial reporting, albeit at the cost of compliance delays.

Nasdaq’s Requirements and Company’s Response

In response to Nasdaq’s compliance notice, Ocean Biomedical is obligated to submit a plan to regain compliance by January 22, 2024, and file the delinquent Form 10-Q by May 20, 2024. 

While the current notice does not immediately impact the listing or trading of Ocean Biomedical’s common stock on the Nasdaq, further delays in filing could potentially jeopardize its market standing.

Ocean Biomedical reassures stakeholders of its intention to expedite the filing of the delinquent Form 10-Q and comply with Nasdaq’s requirements. 

The company’s proactive approach to addressing compliance issues reflects its commitment to regulatory adherence and transparent communication with investors.

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About Ocean Biomedical

Ocean Biomedical, Inc. is a biopharma company headquartered in Providence, Rhode Island, with a distinct business model focused on accelerating the development and commercialization of promising therapeutic assets sourced from research universities and medical centers. 

With a portfolio encompassing advancements in lung cancer, brain cancer, pulmonary fibrosis, and malaria prevention and treatment, Ocean Biomedical aims to deliver impactful solutions to global healthcare challenges.

Implications and Future Outlook

The compliance notice from Nasdaq adds a layer of uncertainty to Ocean Biomedical’s regulatory landscape and market performance. 

Credits: DepositPhotos

As the company navigates through the compliance process and works towards expediting the filing of its Form 10-Q, investors and stakeholders will closely monitor developments and assess the implications for Ocean Biomedical’s financial stability and strategic trajectory. 

Transparent communication and proactive regulatory compliance efforts will be critical for Ocean Biomedical to maintain investor confidence and safeguard its market standing amidst regulatory scrutiny.

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