Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 214

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 2
Chunk 214
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805, Business
Combinations, AHAC is treated as the “acquired” company for financial reporting purposes. See Note 3, Business Combination
and Backstop Agreement, of our condensed consolidated financial statements included elsewhere in this Report for additional detail
about the Business Combination and related transactions. The Liquidity and Capital Resources section below also includes further
discussion of these transactions.

As
a result of becoming a public company, we have begun, and will continue to need to hire additional staff and implement processes and
procedures to address public company regulatory requirements and customary practices. We incurred and expect to continue to incur additional
annual expenses for, among other things, directors’ and officers’ liability insurance, director fees and additional internal
and external accounting, legal and administrative resources and fees.

Components
of Our Results of Operations

Revenue

To
date, we have not generated any revenue from any sources, including from product sales, and we do not expect to generate any revenue
from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result
in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales. However,
there can be no assurance as to when we will generate such revenue, if at all.

38

Operating
Expenses

Research
and Development Expenses

To
date, research and development expenses consist, or will consist, primarily of costs incurred for our research activities, including
the development of our product candidates, as well as stock-based compensation. We expense research and development costs as incurred,
which we expect will primarily include:

    ●
    expenses incurred under
    our licenses and services agreements;

    ●
    Employee-related expenses,
    including salaries and benefits for personnel engaged in research and development functions; and

    ●
    expenses incurred for outside
    services with our CMO relating to the development of certain of our preclinical assets.

We
recognize external development costs based on an evaluation of the progress to completion of specific milestones using information provided
to us by our service providers. This process involves reviewing open contracts and purchase orders, communicating with our personnel
to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred
for the service when we have not yet been invoiced or otherwise notified of actual costs. Such amounts are expensed as the related goods
are delivered or the related services are performed, or until it is no longer expected that the goods