Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 103

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1B
Chunk 103
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 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, 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 cash equivalents.
Cash and cash equivalents are stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency
securities, corporate debt, commercial paper, and certificates of deposit. The Company had minimal cash or cash equivalents as of December
31, 2024 and 2023.

Restricted
Cash

The
Company’s restricted cash is comprised of cash that is restricted as to withdrawal or use. Restricted cash as of December 31, 2024
was $0.2 million, consisting of the portion of proceeds received from the 2023 Convertible Note, as defined in Note 7, Senior Secured
Convertible Notes, that is being held in an escrow account. As of December 31, 2023, the Company’s restricted cash balance
was $1.0 million.

Concentrations
of Credit Risk and Off-balance Sheet Risk

The
Company has held minimal cash and cash equivalents since its inception and certain of its expenses have been paid for by the proceeds
from the issuance of common stock and debt, and by the Company’s Founder and Executive Chairman.

The
Company has no significant off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.
The Company’s future results of operations involve several other risks and uncertainties. Factors that could affect the Company’s
future operating results and cause actual results to vary materially from expectations include, but are not limited to, uncertainty of
results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s product candidates, uncertainty
of market acceptance of the Company’s product candidates, competition from other products, securing and protecting intellectual
property, strategic relationships and dependence on key