Shark Shield company Ocean Guardian collapses

After more than 20 years and two failed IPO attempts, Ocean Guardian — which makes shark deterrent devices — has gone under.

The Ocean Guardian Shark Shield technology can be sued on boats, surfboards and hand held devices. Picture: Ocean Guardian

The company behind the Shark Shield shark deterrent device has collapsed, following two failed attempts to list on the stock exchange and a last-ditch bid to bring in funds from a high net worth investor.

Ocean Guardian, which was previously known as Shark Shield and SeaChange Technology, was set up in March 2002. It had been manufacturing devices which can be used by swimmers and surfers to deter sharks by generating an electric field.

The device works, the company says, by causing discomfort to sharks, which detect the electric field in short range sensory receptors called the Ampullae of Lorenzini.

The technology was developed in the 1990s in partnership with the KwaZulu-Natal Sharks Board in South Africa, before being licensed to then-South Australian company SeaChange Technologies. The company is now based in NSW.

Several iterations of the company’s devices were released over the years, with prices ranging as high as about $800.

The Ocean Guardian Freedom 7 is designed to be worn on divers' ankles and emits an electrical current to deter sharks.

The West Australian Government still offers a $200 rebate for the purchase of the device.

The company said in 2022 it had installed a 365m barrier around a beach in the Bahamas, and its strategy was to expand into large-scale projects.

However, the company, which has about 150 shareholders, fell into administration in May, having posted a loss in each of the past four financial years, on turnover of between $1.45m and $2.6m. In the most recent financial year, to the point when it entered administration in May, the company turned over $915,460 and lost $336,188.

The administrator, Quartz Advisory, said in its report Ocean Guardian launched a bid to list on the ASX in 2022 to raise capital to develop the ‘Shark Barrier’ following an attempt in 2018. “The initial public offer was deferred when it became apparent that there would be a low likelihood of a successful listing due to the difficult market conditions, deemed ‘the worst market conditions in over 10 years’,’’ the report says.

“Ocean Guardian recorded a net loss of $1.2m (unaudited) in FY23 as pre-IPO funding was allocated to preparing Ocean Guardian for a listing and building the Shark Barrier sales pipeline.

“Ocean Guardian forecasted a smaller loss in FY24 than in FY23 assuming capital could be found to enable the purchase of inventory to meet demand, specifically for the dive, boat, and fish products. In December 2023 year to date sales were down compared to the same period in the previous year due to no inventory of boat/fish products for the full period, and no dive inventory during the peak summer selling season.’’

When the IPO bid was set aside, the company looked at other funding options, the report says, including a $5m investment from an “ultra-high net worth” ­investor.

“Two months were spent pursuing this $5m equity transaction. However, the board’s due diligence conducted on the counterparty led to the termination of negotiations,’’ the report says.

The company had also raised $1.6m in convertible notes in April 2022, another $150,000 in convertible notes in August 2022, another $100,000 in May 2023 and carried out a rights issue to raise $2.5m in August 2023.

“The unavailability of working capital to support the operations has left the board with few options to maintain liquidity and solvency,’’ the report says.

“The directors advised that they have spent 10 years building the Ocean Guardian/Shark Shield brands and product portfolio to cover all ocean activities, including the launch of the Shark Barrier solution for large-scale deployment.

“However, without working and growth capital the venture was unable to operate and scale.

“Several parties have expressed an interest in purchasing the operating entity Shark Shield.

“The directors were seeking the best outcome for shareholders, employees, creditors, and customers. However, none of those discussions have progressed sufficiently to finalise the negotiations.’’

The last offer fell through on April 30 this year and the company was placed in administration shortly thereafter.

The administrator has not been able to trade the business due to the previous installation of a receiver.

“Whilst I am unable to trade the business as a going concern, my efforts are presently continuing to preserve the business and assets of Ocean Guardian,” the administrator says in the report.

“As such, the core business of Ocean Guardian is currently in a holding pattern while I seek to undertake a sale of assets/business campaign.

“Given this administration is unfunded, I was unable to conduct an advertising program in the public domain via paid sources. However, to test the market, I contacted a number of parties whom the board had been discussing the sale of assets and IP with before my appointment or knew through personal connections and associations.

“Through our direct contact campaign, we are progressively engaging to sell the assets, IP and core business of Ocean Guardian, currently in a holding pattern. Our discussions with several interested parties are ongoing.’’

The company owes $602,179 to unsecured creditors, the report says.

The shareholders have paid a total of $13.8m for the shares on issue.

A meeting of Ocean Guardian’s creditors will be held on August 30. The administrator was contacted for comment.

Originally published as Shark Shield company Ocean Guardian collapses