Marrone Bio Innovations Inc. said Wednesday it has completed an internal investigation of financial irregularities that have rocked the Davis biotech company, concluding that certain former employees misled the company’s finance department about some sales transactions.
The company, which has struggled significantly since disclosing the problem last fall, also said the San Francisco regional office of the U.S. Securities and Exchange Commission has begun an investigation into the matter.
While the SEC is investigating, Marrone Bio said its in-house probe is “substantially completed.” However, the company hasn’t yet determined whether it must recalculate any of its previously reported quarterly financial results. It said it does plan to “implement promptly” some recommendations made as a result of the probe.
Marrone Bio said its investigation, conducted by a committee of its board of directors, determined that certain employees, who are no longer with the company, provided inaccurate information to Marrone Bio’s finance department about “important transactional terms.”
A maker of eco-friendly pesticides, Marrone Bio stunned investors last fall by disclosing it had found documents “calling into question” about $870,000 in reported revenue for the fourth quarter of 2013. That amounted to about 15 percent of that quarter’s revenue. Marrone Bio’s shares fell by 44 percent in one day, although they’ve recovered somewhat in recent months.
The company was also hit with several shareholder lawsuits.
A month after the announcement, Marrone Bio laid off 23 percent of its staff to conserve cash. It also delayed reporting its quarterly financial results, which has put the company at risk of losing its Nasdaq stock market listing.
In its statement Wednesday, the company said it has been granted an extension by Nasdaq until May 13 to report its quarterly results and get back into compliance with Nasdaq requirements. If it were to lose its Nasdaq status, Marrone Bio would be forced to switch to a less prestigious market. Marrone Bio went public in August 2013.
Wednesday’s announcement came three weeks after Marrone Bio hired a new president and chief operating officer, James Iademarco. The company’s namesake founder, Pam Marrone, remains chief executive officer.
The company’s shares closed Wednesday at $3.50, up 3 cents. The announcement was made after the market closed.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.