Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 639

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 4
Chunk 639
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 obligated to pay the Backstop Parties an amount equal to the product of (i) the maximum number of shares of 8,000,000
less the number of Terminated Shares by (ii) $2.50, defined as the Maturity Consideration in the Backstop Agreement. The Company can
pay the Maturity Consideration in cash or shares of the Company’s common stock if certain conditions are met.

    F-16

On
February 14, 2023, (i) pursuant to the Backstop Agreement, the Backstop Parties purchased 3,535,466 shares of AHAC’s Class A common
stock for $10.56 per share (the “Recycled Shares”) and (ii) pursuant to Polar’s exercise of its right to purchase Additional
Shares, AHAC, Legacy Ocean and Polar entered into a subscription agreement pursuant to which Polar purchased 1,350,000 newly issued shares
of the Company’s common stock at a per share purchase price of approximately $10.56 (the “Polar Subscription”). Under
the Backstop Agreement, the Additional Shares are subject to the same terms as the Recycled Shares, including with regard to repayment
and repurchase.

Subsequent
to Closing, the Prepayment amount was equal to $51.6 million, consisting of $37.3 million for the Recycled Shares and $14.3 million for
the Polar Subscription shares. As the $14.3 million was a netted transaction between the Company and Polar, only $37.3 million was paid
out of the funds the Company received from AHAC’s trust account. This net impact from the payment outflow to Backstop Parties for
the Backstop Agreement of $51.6 million and the proceeds inflow from the issuance of common stock pursuant to the Backstop Agreement
and Polar Subscription of $14.3 million are reported in the Company’s consolidated statement of cash flows.

The
Backstop Agreement consists of two financial instruments that are accounted for as follows:

    (i)
    The
    in-substance written put option which is recorded in the Company’s consolidated financial statements as the “Backstop
    Put Option Liability” and treated as a derivative liability recorded at fair value with changes in fair value recognized in
    net loss. The Company measures the fair value of the Backstop Put Option Liability on a recurring basis, with any fair value adjustment
    recorded within other income/(expense) in the consolidated statements of operations. Refer to Note