Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 15

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 15
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 Put Option Liability and Fixed Maturity Consideration (both as defined below), 2023 and 2024 Convertible
Notes, SPA Warrants, and Ayrton Note Purchase Option (each as defined and discussed in Note 7, Senior Secured Convertible
Notes), are carried at fair value, determined according to Level 3 inputs in the fair value hierarchy described above (see Note
4, Fair Value Measurements). The carrying values of cash, restricted cash, accounts payable, accrued expenses, and short-term
loans approximate their fair values due to the short-term nature of these liabilities.

    10

Backstop
Put Option Liability and Fixed Maturity Consideration

Backstop
Agreement

In
connection with the execution of the Business Combination, AHAC and Legacy Ocean entered into an OTC Equity Prepaid Forward Transaction
(as amended, the “Backstop Agreement”) with the Backstop Parties (as defined in Note 3, Business Combination and Backstop
Agreement). The Backstop Agreement grants the Backstop Parties the right to purchase up to a maximum of 8,000,000 shares of the Company’s
common stock on the open market for $10.56 per share (the “Redemption Price”). The Company agreed to purchase the unsold
portion of the Backstop Shares from the Backstop Parties on a forward basis upon the “Maturity Date” (as amended, the third
anniversary of the closing of the Business Combination, subject to certain acceleration provisions). The purchase price payable by the
Company includes a prepayment in the amount of the Redemption Price per share (the “Prepayment”) from the proceeds released
from the trust account related to those shares. Among the acceleration provisions is the Backstop Parties’ right to accelerate
the Maturity Date if the Company’s stock price trades below a stipulated price per share for any 30 trading days during a 45 day
consecutive trading-day period (in October 2023, this acceleration provision was amended with one Backstop Party providing it the right
to accelerate the Maturity Date if the Company’s stock price trades below a stipulated price per share for any 20 trading days
during a 30 day consecutive trading-day period). On any date following the closing of the Business Combination, the Backstop Parties
also have the option to early terminate the arrangement in whole or in part by providing an optional early termination date notice to
the Company (the “Optional Early Termination”). For those shares that are early