Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 11

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 11
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 program’s value.

    8

Use
of Estimates

The
preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of these financial statements
and reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis,
the Company evaluates its estimates, as applicable, including those related to the fair values of the Company’s common stock and
related stock-based compensation and the valuation of (i) the Backstop Put Option Liability and Fixed Maturity Consideration (both as
defined below) and (ii) the 2023 and 2024 Convertible Notes, SPA Warrant, and Ayrton Note Purchase Option (each as defined in Note 7,
Senior Secured Convertible Notes). The Company bases its estimates using Company forecasts and future plans, current economic conditions,
and information from third-party professionals that management believes to be reasonable under 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 rates, 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 as of September
30, 2024 and December 31, 2023.

Restricted
Cash

The
Company’s restricted cash is comprised of cash that is restricted as to withdrawal or use. Restricted cash as of September 30,
2024 and December 31, 2023 was $0.2 million and $1.0 million, respectively, consisting of the portion of proceeds received from the 2023
Convertible Note, as