Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 30

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 30
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, for further detail on the Notes.

    16

In
connection with the assumption of AHAC’s loans and pursuant to the terms of the Business Combination Agreement described above,
the Company issued 1,365,000 shares of its common stock to the Sponsor as consideration for providing the loans to the Company (the “Sponsor
Extension Shares”). In addition, pursuant to the terms of an amendment entered into prior to the paydown of the loans, the Company
issued a total of 200,000 shares of its common stock in exchange for extensions of the maturity date.

The
Company recognized a loss on extinguishment of debt of $1.2 million in its condensed consolidated statements of operations for the nine
months ended September 30, 2023 for the 200,000 shares issued in exchange for extensions of the maturity date, based on the grant date
fair value of the shares issued. In addition, the Company recognized a loss on extinguishment of debt of $13.6 million in its condensed
consolidated statements of operations for the nine months ended September 30, 2023 for the issuance of the Sponsor Extension Shares,
based on the grant date fair value. Further, the Company recorded interest expense of $36 thousand in its condensed consolidated statements
of operations for the nine months ended September 30, 2023.

Deferred
Underwriting Commissions

At
Closing, the underwriters for AHAC’s initial public offering (“IPO”) agreed to defer payment of $3.2 million of deferred
underwriting discounts otherwise due to them until November 14, 2023, pursuant to the terms of a promissory note (the “Underwriter
Promissory Note”). The deferred amounts bear interest at 9% per annum and 24% per annum following an event of default under the
promissory note. The Company has a right to pay up to fifty percent (50%) of the principal and interest due on this promissory note using
the common stock of the Company at a price per share of $10.56. The remaining fifty percent (50%) of the principal and interest due on
this promissory note must be paid in cash. The Company recorded $0.1 million of interest expense on the outstanding balance in the Company’s
condensed consolidated financial statements for each of the three months ended September 30, 2024 and 2023. The Company recorded $0.4
million and $0.2 million of interest expense