Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 111

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 111
---
. A description of the Company’s significant accounting policies is included in the Company’s audited consolidated
financial statements as of December 31, 2023. These unaudited condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and related notes in the Company’s 2023 Annual Report on Form 10-K, filed with the SEC
on November 25, 2024.

The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries
after elimination of all intercompany accounts and transactions. The subsidiaries were formed to organize the Company’s therapeutic
programs in order to optimize multiple commercialization options and to maximize each program’s value.

    8

Use
of Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of these financial statements
and reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis,
the Company evaluates its estimates, as applicable, including those related to the fair values of the Company’s common stock and
related stock-based compensation and the valuation of (i) the Backstop Put Option Liability and Fixed Maturity Consideration (both as
defined below) and (ii) the 2023 and 2024 Convertible Notes, SPA Warrant, and Ayrton Note Purchase Option (each as defined in Note 7,
Senior Secured Convertible Notes). The Company bases its estimates using Company forecasts and future plans, current economic conditions,
and information from third-party professionals that management believes to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses that are not
readily apparent from other sources and adjusts those estimates and assumptions when facts and circumstances dictate.

The
Company’s results can also be affected by economic, political, legislative, regulatory or legal actions. Economic conditions, such
as recessionary trends, inflation, interest rates, changes in regulatory laws and monetary exchange rates, and government fiscal policies,
can have a significant effect on operations. The Company could also be affected by civil, criminal, regulatory or administrative actions,
claims, or proceedings.

Cash
and Cash Equivalents

The
Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be