Business & Real Estate

Why a Davis biotech company is raising new capital

Pam Marrone, founder and chief executive of Marrone Bio Innovations, tours the company’s greenhouse in Davis.
Pam Marrone, founder and chief executive of Marrone Bio Innovations, tours the company’s greenhouse in Davis. Sacramento Bee file

Davis biotech firm Marrone Bio Innovations Inc., seeking to shore up its troubled finances, said Friday it will attempt to raise millions in new capital.

A maker of eco-friendly pesticides and other agricultural products, Marrone filed a registration with the Securities and Exchange Commission to sell stock and other securities. The company said it wants to raise up to $15 million through a common stock sale. No timetable was set for the sale.

The company also said it could raise $50 million through a combination of stock, debt and other securities “which may be offered from time to time.”

Marrone needs a capital infusion. In an SEC filing accompanying its third quarter financial results, the company said it had $19 million in cash on Sept. 30 but is continuing to lose money and there is “substantial doubt about our ability to continue as a going concern.” Marrone issued similar warnings earlier this year through SEC filings.

Although revenues have grown and expenses have been trimmed, the company lost $23.3 million in the first nine months of the year.

The company is trying to recover from an accounting scandal. Its former chief operating officer, Hector Absi, was indicted earlier this year on charges of inflating sales figures. He has pleaded innocent. Marrone paid $12 million to settle shareholder lawsuits over the case, although the cost was covered by insurance.

Marrone shares closed at $2.29 Friday on Nasdaq, down 11 cents.

Dale Kasler: 916-321-1066, @dakasler

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