Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2642

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1
Chunk 2642
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 a failure to comply with
these laws or regulations. If any actions are instituted against us and we are not successful in defending ourselves or asserting our
rights, those actions could result in the imposition of civil, criminal and administrative penalties, damages, monetary fines, imprisonment,
disgorgement, possible exclusion from participation in government healthcare programs, additional reporting obligations and oversight
if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws,
contractual damages, reputational harm, diminished profits and future earnings and the curtailment of our operations.

108

Risks
Related to Tax and Accounting Matters

Our
ability to use our net operating loss carryforwards and certain tax credit carryforwards may be subject to limitation.

We
may from time to time generate net operating loss carryforwards that would be available to reduce future U.S. federal and state taxable
income. Certain of these carryforwards may be carried forward indefinitely for U.S. federal tax purposes. It is possible that we will
not generate taxable income in time to use all or a portion of these net operating loss carryforwards before their expiration or at all.
Under legislative changes made in December 2017, U.S. federal net operating losses incurred in 2018 and in future years may be carried
forward indefinitely, but may only offset 80% of our taxable income in any given year. In addition, our net operating loss carryforwards
are subject to review and possible adjustment by the IRS, and state tax authorities. The federal and state net operating loss carryforwards
and certain other attributes, such as research tax credits, may be subject to significant limitations under Section 382 and Section 383
of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), respectively, and similar provisions of U.S. state law.
Under those sections of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use
its pre-change net operating loss carryforwards and other pre-change attributes to offset its post-change income or tax may be limited.
In general, an “ownership change” would occur if the percentage of our equity interests held by one or more of our “5-percent
shareholders” (as such term is used in Section 382 of the Code) increased by more than 50 percentage points over the lowest percentage
of our equity held by such 5-percent shareholders at any time during the relevant testing period (