Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 3366

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1A
Chunk 3366
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 the institution,
the individual inventor(s), and their department or school.

Licensing
to a large pharmaceutical company is appealing due to the vast resources it may employ to pursue commercial development and the potential
for large up-front and milestone payments. However, these companies often only license innovations later in their development. Therefore,
licenses to large pharmaceutical companies are relatively rare.

Researchers
often choose to license their innovations to startups because (i) they see greater economic upside (as compared to only receiving a fraction
of what their institution receives), (ii) they view a startup as a way to retain more control over the development of their innovation
and (iii) a startup may be the only option given the challenges of licensing to larger companies. The researcher typically takes a non-operating
role as a scientific founder of the startup, and holds between a 10% and 20% equity stake in the enterprise, which will be subject to
dilution over time.

14

We
can provide the resources and capital of a pharma licensee while also providing the more compelling economic upsides of a startup. Each
patent portfolio that we license in from an institution (capturing the discoveries of one or more researchers) are housed, or in the
future will be housed in a separate unit or subsidiary which we title a ‘program’. We can provide the institution and the
researchers a share in the potential economic upside of that particular program regardless of how that economic upside comes about. The
proposed share we envision is a 20% total in such subsidiaries – with approximately 10% to the institution and approximately 10%
to the researchers, a significantly higher stake than they would typically be able to hold in a startup venture.

We
believe institutions and their researchers will prefer Ocean Biomedical to launching a startup because Ocean Biomedical eliminates the
challenge of needing to raise capital and hire a team, and provides a greater share in the upside. Likewise, we believe Ocean Biomedical
will be a preferred choice as opposed to licensing to large pharmaceutical companies because receiving a percentage of any economic value,
regardless of how it is derived, is often more attractive than relying on fixed milestone payments or single-digit royalties.

We
believe our approach will give us preferred access to innovations at research universities and medical centers, and that this in turn
will benefit our shareholders.

Our
Pipeline Funnel Process

Our
core competencies for acquiring and developing pipeline programs include: (1) identifying, assessing and selecting inventions and technologies
(from research