Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 577

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 4
Chunk 577
---
 of future events, and we cannot assure you that any
design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Based upon this evaluation,
our Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were not effective
because of the material weaknesses in internal control over financial reporting described below. In light of the material weaknesses, management
performed additional procedures to validate the accuracy and completeness of the financial results impacted by the control deficiencies.
Such procedures included the validation of data underlying key financial models, substantive logic inspection, fluctuation analyses,
and detailed testing.

In
connection with the preparation and audits of our financial statements as of December 31, 2023 and 2024, we have identified material
weaknesses as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and by the Public Company
Accounting Oversight Board (United States) in our internal control over financial reporting, as follows:

    ●
    Management
    does not have adequate staffing in its accounting department and has not yet designed and implemented the appropriate processes and
    internal controls to support accurate and timely financial reporting.

    ●
    During the audit process for December 31, 2024, management identified a
material weakness in the design of the Company’s internal controls related to our review of third-party valuation deliverables regarding
our convertible debt and warrant liability.

We
have begun taking measures, and plan to continue to take measures, to remediate the material weaknesses. These measures include
hiring or engaging additional accounting personnel with familiarity with reporting under U.S. GAAP, including hiring of Jolie Kahn
as our Chief Financial Officer and implementing and adopting additional controls and formal policies, processes and documentation
procedures relating to financial reporting. Due to the control weaknesses outlined above, management has implemented additional
measures to review the key inputs and assumptions used by third-party valuation subject matter specialists. These enhancements aim
to address deficiencies in the fair value calculation of the convertible note and warrant liability. We plan to undertake
recruitment efforts to identify additional accounting personnel, including possible use of third-party service providers.
Remediation costs consist primarily of additional personnel expenses. We may identify additional material weaknesses in the future
or otherwise fail to maintain proper and effective internal controls, which may impair our ability to produce accurate financial
statements on a timely basis.

160

However,
the implementation of these measures may not be sufficient to remediate the control deficiencies that may