Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 6

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 2
Chunk 6
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General and Administrative
Expenses

General and administrative expenses
consist, or will consist, primarily of salaries and benefits, travel and stock-based compensation expense for personnel in executive,
business development, finance, legal, human resources, information technology, pre-commercial and support personnel functions. General
and administrative expenses also include direct and allocated facility-related costs, insurance costs, stock-based compensation, and professional
fees for internal and external accounting services, legal, patent, consulting, investor and public relations.

We anticipate that our general
and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and
development of our product candidates and prepare for potential commercialization activities. We also incur significantly increased accounting,
audit, legal, regulatory, tax, compliance with Nasdaq and SEC requirements, and director and officer insurance costs as well as investor
and public relations expenses associated with operating as a public company. If and when we believe a regulatory approval of a product
candidate appears likely, we anticipate an increase in payroll and other employee-related expenses as a result of our preparation for
commercial operations as it relates to the sales and marketing of that product candidate.

39

Income Taxes

Income taxes are recorded in
accordance with FASB ASC 740, Income Taxes, which provides for deferred taxes using an asset and liability approach. We recognize
deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements
or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, and net operating
loss, or NOL, carryforwards and research and development tax credit carryforwards. Valuation allowances are provided, if based upon the
weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We have recorded
a full valuation allowance to reduce our net deferred income tax assets to zero. In the event we were to determine that we would be able
to realize some or all of our deferred income tax assets in the future, an adjustment to the deferred income tax asset valuation allowance
would increase income in the period such determination was made. As a consequence, we have recorded no income tax expense nor benefit
for all years presented.

Comparison of the Three
months Ended March 31, 2025 and 2024