Marizyme CEO resigns after just six months on job

FORT COLLINS — Marizyme Inc., a Fort Collins-based biopharmaceutical company, has undergone yet another CEO change, with Michael Handley resigning after just six months on the job. Handley’s resignation came even as the company expressed doubts about its ability to continue operations.

Handley was named CEO in September 2018, signing a three-year employment agreement. But that position didn’t last: Handley resigned in March 28, according to a document filed April 2 with the U.S. Securities and Exchange Commission.

“Handley’s resignation was not a result of any disagreement with the company, the company’s management, or the board of directors,” the company said in the filing.

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Neither Handley nor Marizyme officials could be reached for comment. A call to the phone number listed on Marizyme’s SEC filing forwarded to an automatic voicemail indicating that the mailbox was full and could not accept messages.

Handley’s employment contract with Marizyme included a base salary of $490,000, with bonuses of up to 55 percent of his base salary at the sole discretion of the board of directors, according to a 10k report filed with the SEC. Handley’s base salary, however, was not to accrue or become effective “unless and until” the company raised at least $2 million.

That 10k also revealed concerns expressed by Handley and the company’s chief financial officer, who evaluated Marizyme’s disclosure controls and procedures and determined that there were “material weaknesses,” including:

• The company’s lack of sufficient accounting personnel with the requisite knowledge of GAAP and the financial reporting requirements of the SEC.
• Lack of segregation of duties of internal accounting and SEC reporting departments.

“We plan to take measures to remediate these deficiencies, such as hiring additional qualified personnel and providing additional training to our accounting staff in US GAAP,” the company said in its filing. “However, the implementation of these measures may not fully address the control deficiencies in our ICFR [Internal Control over Financial Reporting]. Our failure to address any control deficiency could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, effective ICFR is important to prevent fraud.

“As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our shares, may be negatively impacted by a failure to accurately report financial results.”

Marizyme reported revenue of $20,187 for the year ended Dec. 31, compared with revenue of $101,175 the prior year. The company reported a net loss of $248,743 in 2018, compared with a net loss of $570,506 in 2017.

The company reported a net loss of $67,546 for the quarter ended March 31, compared with a net loss of $47,971 for the same period in 2018. The company had no revenue during the period.

Marizyme’s quarterly report reported negligible cash resources — just $191 — at the end of the first quarter.

“At March 31, 2019, our accumulated stockholders’ deficit was $29,998,088 compared to $29,922,542 at December 31, 2018,” the company said. “There is substantial doubt as to our ability to continue as a going concern.”

Marizyme announced in September that it had acquired its first assets, a novel protease drug platform that uses a new combination of enzymes, first developed by Pharmacia Corp. in Sweden. The treatment has been tested in more than 551 patients and has shown efficacy in wound healing, thrombogenic disease and anti-viral applications.

Marizyme intends to seek other acquisition opportunities in the life-sciences space, but lack of funds could prevent that strategy from taking effect.

“During the entire fiscal year 2018 and for the first quarter of 2019 the company sought other strategic assets in the biotechnology space,” the company said. “The company will look to utilize internal and external sources for financing future projects. These sources may provide the necessary funds to support the working capital needs of the company.

“There can be no assurances, however, that the company will be able to obtain additional funds from these or any other sources or that such funds will be sufficient to permit the company to implement its intended business strategy. In the event, the company is not able to generate additional funds, management will postpone any planned or proposed acquisitions until the available financing for such projects will be sufficient. Management believes, in accordance with the above-mentioned statement, the company will need to raise money to support its standard operations for the current fiscal period.”

Marizyme also reported that it has sold $125,000 of its common stock to two investors, including 113,637 shares priced at $1.10 per share.