Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 69

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 69
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 default under the promissory note. The Company
has a right to pay up to fifty percent (50%) of the principal and interest due on this promissory note using the common stock of the Company
at a price per share of $10.56. The remaining fifty percent (50%) of the principal and interest due on this promissory note must be paid
in cash. The Company recorded $0.1 million and $36 thousand of interest expense on the outstanding balance in the Company’s condensed
consolidated financial statements for the fiscal quarters ended March 31, 2024, and 2023, respectively.

On March 4, 2024, the Company
converted the convertible portion of the Underwriter Promissory Note into 169,582 restricted shares of its common stock at the conversion
price of $10.56. The principal amount converted was $1.6 million, plus $0.2 million of accrued interest thereon. As of March 31, 2024,
the Company had not repaid any of the remaining principal balance of $1.6 million, which is recorded as a short-term loan in the condensed
consolidated balance sheets.

On November 13, 2024, the Company
received a notice of default with regard to its 2023 promissory note with EF Hutton, which alleges that $2.1 million is due under the
promissory note, consisting of the unpaid principal balance of $1.6 million, plus accrued and unpaid interest of $0.5 million.

4. Fair Value Measurements

Financial liabilities
measured at fair value during the year on a recurring basis consisted of the following as of March 31, 2025:

Schedule
of Fair Value of Assets and Liabilities

    (in thousands) 
    Level 1  
    Level 2  
    Level 3  
    Total 

    Fair Value Hierarchy  

    (in thousands) 
    Level 1  
    Level 2  
    Level 3  
    Total 
  
    Financial liabilities: 

    Backstop Put Option Liability 
    $ -  
    $ -  
    $(61,411) 
    $(61,411)
  
    Fixed Maturity Consideration 
     -  
     -  
     (6,002) 
     (6,002)
  
    2024 Convertible Note (1