Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 3309

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 9A
Chunk 3309
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 such conversion, the noteholder (together with certain of its affiliates and other related
parties) would beneficially own in excess of 9.99% of the shares of the Company’s common stock outstanding immediately after giving
effect to such conversion. Upon a change of control of the Company, noteholders may require the Company to redeem all, or any portion,
of the Notes at a price stipulated by certain conditions as discussed within the SPA. At December 31, 2023, the principal amount outstanding
under the 2023 Convertible Note was $7.6 million.

The
Notes provide for certain events of default, including, among other things, any breach of the covenants described in the SPA and any
failure of Dr. Chirinjeev Kathuria to be the chairman of the Company’s Board of Directors. In connection with an event of default,
the noteholders may require the Company to redeem all or any portion of the Notes, at a premium set forth in the SPA.

The
Company is subject to certain customary affirmative and negative covenants regarding the rank of the Notes, the incurrence of indebtedness,
the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions
or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with affiliates, among other customary matters.
The Company is also subject to financial covenants requiring that (i) the amount of the Company’s available cash equals or exceeds
$3.0 million at the time of each Additional Closing; (ii) the ratio of (a) the outstanding principal amount of the Notes, accrued and
unpaid interest thereon, and accrued and unpaid late charges to (b) the Company’s average market capitalization over the prior
ten trading days, not exceeding 35%; and (iii) at any time any Notes remain outstanding, with respect to any given calendar month (each,
a “Current Calendar Month”) (x) the available cash on the last calendar day in such Current Calendar Month shall be greater
than or equal to the available cash on the last calendar day of the month prior to such Current Calendar Month less $1.5 million.

The
Company has elected to account for the Notes at fair value under the fair value option, under which the Notes were initially
measured at fair value and subsequently re-measured during each reporting period. Changes in fair value are