Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 155

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 155
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 grants in the Company’s controlling shareholder were deemed to be transactions incurred by the shareholder and
within the scope of ASC 718, Stock Compensation. As a result, the related transactions by the shareholder were pushed down into
the Company’s condensed consolidated financial statements. As of September 30, 2024, Legacy Ocean’s founder held 100% of
the voting power and 68% of the equity interests in Poseidon. The related stock-based compensation recognized is discussed below.

Stock-Based
Compensation

The
Company recognizes stock-based compensation costs for equity-based compensation awards granted to employees, nonemployees, and directors
in accordance with U.S. GAAP. The Company estimates the fair value and the resulting amounts using the Black-Scholes option-pricing model.
The fair value is recognized on a straight-line basis over the requisite service periods but accelerated to the extent that grants vest
sooner than on a straight-line basis. Forfeitures are accounted for as they occur and requires management to make a number of other assumptions,
including the volatility of the underlying shares, the risk-free interest rate, and expected dividends. Expected volatility is based
on the historical share volatility of a set of comparable publicly traded companies over a period of time equal to the expected term
of the grant or option.

    26

Stock-based
compensation for the three and nine months ended September 30, 2024 consisted of costs related to (i) stock options granted to non-employee
directors in the first quarter of 2023 and (ii) warrants issued to advisors and consultants, as discussed below. Stock-based compensation
for the three and nine months ended September 30, 2024 solely consisted of costs related to the profit interests in Poseidon. The following
table summarizes the allocation of stock-based compensation for the stock options, warrants, and Class B profit interests for the three
and nine months ended September 30, 2024 and 2023, respectively:

 Schedule of Allocation of Stock-based Compensation

    (in thousands)
     
    2024

    2023

    2024

    2023

    For
    the Three Months Ended 
    September 30,

    For
    the Nine months Ended 
    September 30,

    (in thousands)
     
    2024

    2023

    2024

    2023

    Stock-based compensation:

    Research
    and development (1)
     
    $