Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 132

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 132
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Accounting Policies

Basis of Presentation

The
accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP and stated in
U.S. dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the
Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial
Accounting Standards Board (“FASB”). Certain information and note disclosures normally included in annual financial
statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations. In the
opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which include only normal
recurring adjustments, necessary for the fair statement of the balances and results for the periods presented. A description of the
Company’s significant accounting policies is included in the Company’s audited consolidated financial statements as of
December 31, 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated
financial statements and related notes in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on April 8,
2025.

The accompanying unaudited condensed
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of all intercompany
accounts and transactions. The subsidiaries were formed to organize the Company’s therapeutic programs in order to optimize multiple
commercialization options and to maximize each program’s value.

    9

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 2024
Convertible Note, 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