Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2471

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1
Chunk 2471
---
 where Ocean Biomedical houses each program in a subsidiary. We currently house our programs in four wholly-owned
subsidiaries and intend to grant a certain percentage of the ownership in future subsidiaries, typically 20% in aggregate, to the institution
and to the relevant researchers. This anticipated organizational structure for future subsidiaries is unique in the market and we believe
it will make us the partner of choice for institutions and inventors.

Currently,
research universities and medical centers (institutions) have two primary options to commercialize their biomedical innovations and technologies:
licensing to pharma, or licensing to startups that are usually founded or co-founded by the researchers (the inventors) behind the innovations.
Most commonly, the IP policy of U.S. institutions specifies that economic value received from licenses is split equally among the institution,
the individual inventor(s), and their department or school.

Licensing
to a large pharmaceutical company is appealing due to the vast resources it may employ to pursue commercial development and the potential
for large up-front and milestone payments. However, these companies often only license innovations later in their development. Therefore,
licenses to large pharmaceutical companies are relatively rare.

Researchers
often choose to license their innovations to startups because (i) they see greater economic upside (as compared to only receiving a fraction
of what their institution receives), (ii) they view a startup as a way to retain more control over the development of their innovation
and (iii) a startup may be the only option given the challenges of licensing to larger companies. The researcher typically takes a non-operating
role as a scientific founder of the startup, and holds between a 10% and 20% equity stake in the enterprise, which will be subject to
dilution over time.

14

We
can provide the resources and capital of a pharma licensee while also providing the more compelling economic upsides of a startup. Each
patent portfolio that we license in from an institution (capturing the discoveries of one or more researchers) are housed, or in the
future will be housed in a separate unit or subsidiary which we title a ‘program’. We can provide the institution and the
researchers a share in the potential economic upside of that particular program regardless of how that economic upside comes about. The
proposed share we envision is a 20% total in such subsidiaries – with approximately 10% to the institution and approximately 10%
to the researchers, a significantly higher stake than they would typically be able to hold in a startup venture.

We