Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 44

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 44
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 the Securities Exchange Act of
1934 as amended.

The principal amount of the new note issued in exchange for the Existing
Notes is $9.7 million, after giving effect to the principal amount of the Existing Notes, the Event of Default Interest to date and Redemption
Premium. At
July 15, 2024, the Existing Notes were valued at $7.1
million, consisting of the fair value of the
Existing Notes of $6.3
million, plus accrued and unpaid interest of
$0.8
million. The new $9.7
million notes were valued at $6.8
million, resulting in a gain on exchange of notes
of $0.3
million. Similarly, the Company valued the SPA
Warrants issued in 2023 at $1.6
million and the value of the SPA Warrants issued
in the exchange in 2024 at $3.8
million, resulting in a loss on exchange of notes
of $2.2
million. The Company has recorded a net loss
on exchange of notes of $1.9
million as other income (expense) on its condensed consolidated
statement of operations for the three months ended September 30, 2024. At September 30, 2024, the principal amount outstanding under the 2024
Convertible Note was $10.6 million.

As part of the agreement, Chirinjeev
Kathuria, the Company’s Chairman, and Poseidon Bio, LLC, an entity controlled by Dr. Kathuria, also agreed to grant a proxy on all
of their shares of the Company’s common stock to an independent third party, to vote them as that party sees fit, until such time
as the Notes are paid in full.

As of September 30, 2024, the Company is in default of its obligations
with respect to Ayrton LLC as a result of, among other things, its delinquent SEC filings.

    22

8.
Commitments and Contingencies

Litigation

From
time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities,
including the significant matters described below that could have a material impact on our results of operations and cash flows. In many
proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or
even reasonably possible or to estimate the size or range