Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 1146

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 7
Chunk 1146
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 liability for
the purchase option within the SPA in favor of the investor (the “Ayrton Note Purchase Option”), which gives the
investor, at its option through 2025, the right to purchase from the Company additional Notes (up to the sum of the aggregate
principal amount) at one or more additional closings. The initial recognition of this liability was measured at fair value utilizing
the Black-Scholes Merton model and the fair value of $0.5
million was recorded to other income (expense) on the consolidated statements of operations. The liability is recorded within
current liabilities on the Company’s consolidated balance sheet as of December 31, 2024 and 2023. The liability is remeasured
at each reporting period and the Company records any changes to fair value as necessary.

    F-13

Effective
July 23, 2024, the Company entered into an amendment and exchange agreement, whereby the 2023 Convertible Notes were exchanged for
new notes and also included further arrangements to fund up to $7.7
million in additional secured notes (collectively, the “2024 Convertible Notes”). The first two tranches of additional
secured notes of $1.0
million and $2.7
million were funded in July 2024 and November 2024, respectively, to various vendors on behalf of the Company to address costs of
the Company in preparing its 2023 consolidated financial statements and subsequent quarterly reporting requirements, among other
things. The balance of the funds shall be released by the investor upon the Company reaching certain milestones over the next
several months.

All
prior defaults under the existing transaction documents have been deemed cured, and there was a late filing carveout until August
15, 2024. The current Notes had an extension of the maturity date until December 15, 2024 and installment payments have been waived
until the earlier of the date on which the Company’s 2023 Form 10-K was filed and September 1, 2024, with subsequent
installments continuing to be due on the first of each month thereafter. The investor has agreed to extend the maturity to April
2025. No payments have been made.

The
Company shall issue to the investor 3,844,466 restricted shares of its common stock in settlement of all past defaults and penalty shares
to be issued in conjunction therewith, subject to a leak out of 15% of daily trading value unless the sales